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Zerodha

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Zerodha Broking Ltd
IndustryFinancial services
FoundedAugust 2010; 14 years ago (August 2010)
FounderNithin Kamath & Nikhil Kamath
Headquarters
Bengaluru, Karnataka
,
India
Services
RevenueIncrease ₹83.7 billion (US$1.0 billion) (FY24)[1]
Increase ₹47 billion (US$560 million) (FY24)[1]
SubsidiariesZerodha Commodities Pvt. Ltd
Websitezerodha.com

Zerodha Broking Ltd. is an Indian stock broker and financial services company that is member of the National Stock Exchange of India (NSE), Bombay Stock Exchange (BSE), and the Multi Commodity Exchange (MCX). It offers institutional and retail brokerage, currency and commodity trading, mutual funds and bonds.[2][3]

Founded in 2010, the company is headquartered in Bengaluru and has a physical presence in many major Indian cities.[4][5][6][7] As of May 2024, they have an active client base of 7.5 million customers registered with the NSE, giving them a market share of 17.5% and making them the 2nd largest broker in India.[8][9]

History

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The company was founded in August 2010 by brothers Nithin and Nikhil Kamath. The company's name Zerodha, indicates a combination of words for the company's ideals: Zero and "Rodha", the Sanskrit word for "barrier".[10]

As of 2019, Zerodha was the largest retail stock broker in India by active client base and contributes up to 2% of daily retail volumes on Indian stock exchanges.[11]

In June 2020, Zerodha entered the "unicorn club" with a self-valuation of around $1 billion. This valuation was based on the ESOP buyback exercise that the company undertook by valuing each share at more than four times the book value of ₹700 per share.[12]

In 2020, Zerodha applied for a licence to set up an AMC mutual fund in India and they launched their fund house in 2024.[13][14]

Society

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A fixed commission of up to ₹20 is applied to all trading and derivative transactions, regardless of its size, and offers its retail clients a host of purpose-built trading applications. Equity delivery is free.[11]

Zerodha has a base of more than 1.2 million[15] active customers until 2020.[16][17] By the end of 2022, the number rose to 10 million.[18] The company also offers commodity trading through its wholly owned subsidiary, Zerodha Commodities Pvt. Ltd.[19]

It won the "Economic Times Startup Awards 2016" in the "Bootstrap Champ".[20] The company also won the BSE – D&B "Emerging Equity Broking House Award" in 2014 and 2015 and the NSE "Retail Broker of the Year" award in 2018.[21]

Rainmatter

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In 2014, Rainmatter was founded as an early-stage fund with a corpus of ₹500 million (equivalent to ₹800 million or US$9.6 million in 2023). By keeping the ticket size under $1 million per investment, the fund focused on reducing risk but focused on financing start-ups in new technology and new product development. Some notable investments by Rainmatter are in startups such as Cred, Finception, Smallcase, and Sensibull.[13][22][23] The company has also backed GoldenPi and WintWealth, which are bond purchasing platforms.[24][25]

True Beacon

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In 2019, Zerodha started True Beacon, the Alternative Investment Fund focused on providing returns in volatile markets through their defensive investment strategy. The $2 million minimum investment fund was able to generate a return of more than 13% in its first year. [26]

Zerodha Fund House

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On 30 October 2023, in a partnership with smallcase, they launched Zerodha Fund House, an asset management company. It focused on index funds and had only direct plans which paid no commissions to distributors.[27][28] The first fund they launched tracked the Nifty LargeMidcap250 index.[29] In March 2024, the fund house achieved an AUM of ₹10 billion (US$120 million).[30][31]

FLOSS Fund

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On 15 October 2024, Zerodha announced the FLOSS Fund. The fund is dedicated to supporting critical, influential, and valuable Free/Libre and Open Source projects globally. Zerodha committed to giving up to $1 million per year to support developers and communities that create and maintain projects, big and small. Projects can apply for $10,000, $25,000, $50,000, $75,000, or $100,000 in funding per year.[32]

Technical problems and interruptions

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There have been multiple reports of technical issues including glitches, system outages and connectivity issues on Zerodha's Kite, especially on days with high market volatility and F&O expiry days.[33][34][35][36]

In November 2020, Livemint reported that some Zerodha traders complained of being unable to access its Kite platform due to a technical issue. Several users took to Twitter to report a login issue. Zerodha, in an official statement, admitted the problem.[37]

On 21 August 2024, Nithin announced that Zerodha was discontinuing its referral programme. This decision followed an NSE circular, which prohibits brokers from offering referral incentives in the form of brokerage sharing unless the individual was registered as an authorized person with the exchanges.[38]

See also

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References

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  1. ^ a b "Zerodha hits Rs 8,370 Cr revenue with over 55% profit margin in FY24". EnTrackr.
  2. ^ Barbora, Lisa Pallavi (12 April 2013). "Advantage customers: providers shift focus". LiveMint. Archived from the original on 25 June 2024. Retrieved 23 March 2024.
  3. ^ "Bengaluru broking firm Zerodha scraps fee for cash trades; rivals miffed by move". The Economic Times. 2 December 2015. Archived from the original on 25 June 2024. Retrieved 23 March 2024.
  4. ^ Baruah, Ayushman (25 October 2016). "Zerodha Trade Winds of Change". Business World India. Archived from the original on 27 October 2016. Retrieved 23 March 2024.
  5. ^ "Zerodha opens its Ahmedabad support center". The Economic Times. 30 May 2013. Archived from the original on 30 July 2013. Retrieved 23 March 2023.
  6. ^ R, Venkatesan (12 January 2018). "Active accounts: discount brokers gain market share". The Hindu Businessline. Archived from the original on 25 June 2024. Retrieved 23 March 2024.
  7. ^ Jha, Sneha (3 April 2018). "Technology helps us unleash innovation in the capital markets: Zerodha CTO Kailash Nadh". Economic Times | CIO. Archived from the original on 25 June 2024. Retrieved 23 March 2024.
  8. ^ Tiwari, Khushboo (15 April 2024). "Brokerage firm Groww seals top spot with nearly 23% market share". Business Standard. Archived from the original on 16 April 2024. Retrieved 16 June 2024.
  9. ^ "Report 1C: Report of Redressal of Complaints lodged by clients against Trading Members (TMs) during 2024-25: Last Updated on 31-MAY-2024". National Stock Exchange of India. 31 May 2024. Archived from the original on 11 June 2024. Retrieved 16 June 2024.
  10. ^ "Zerodha - About". Zerodha.com.
  11. ^ a b Chitra, Rachel; Sinha, Partha (10 January 2019). "Zerodha replaces biggies as largest broker in India". The Times of India. Archived from the original on 26 September 2023. Retrieved 23 March 2024.
  12. ^ Bhalla, Kritti (22 June 2020). "Zerodha Claims Unicorn Valuation In ESOPs Buyback Plan". Inc42 Media. Archived from the original on 25 June 2024. Retrieved 23 March 2024.
  13. ^ a b "Zerodha: More than a discount-broking company". A Word To The World. 10 April 2023. Retrieved 23 March 2024.
  14. ^ "Zerodha applies for mutual fund license". Economic Times. 20 February 2020. Archived from the original on 25 June 2024. Retrieved 23 March 2024.
  15. ^ Arakali, Harichandan (21 September 2018). "Nithin and Nikhil Kamath: Code Zero". Forbes India. Retrieved 23 March 2024.
  16. ^ Mascarenhas, Rajesh (12 March 2015). "Average daily turnover surges in both F&O and cash segments; HNIs also get into the mix". Economic Times. Archived from the original on 17 March 2015. Retrieved 23 March 2024.
  17. ^ Chanchani, Madhav (3 September 2015). "Broking startup Zerodha to enter non-banking finance space and expand overseas". The Economic Times. Archived from the original on 6 September 2015. Retrieved 23 March 2024.
  18. ^ "Why are so many Indians piling into stocks?". The Economist. Archived from the original on 10 May 2024. Retrieved 10 May 2024.
  19. ^ "Zerodha Commodities Pvt. Ltd". zerodha.com. Archived from the original on 27 September 2012. Retrieved 23 March 2024.
  20. ^ "ET Startup Awards 2016: How the Bootstrap Champ Zerodha is taking investment to the masses". The Economic Times. 12 January 2016. Archived from the original on 25 June 2024. Retrieved 23 March 2024.
  21. ^ Kamath, Nithin (4 December 2018). ""Zerodha – India's best retail brokerage for 2018" by NSE". Zerodha blog. Archived from the original on 23 March 2024. Retrieved 23 March 2024.
  22. ^ Bhakta, Pratik (24 September 2019). "Zerodha's Rainmatter invests Rs 4 crore in Finception". Economic Times. Archived from the original on 24 June 2020. Retrieved 23 March 2024.
  23. ^ Bhakta, Pratik (14 November 2019). "Zerodha steps up as angel investor". Economic Times. Retrieved 23 March 2024.
  24. ^ Roy, Kumar Shankar (26 November 2022). "GoldenPi: Should you buy bonds on this platform?". BusinessLine. Archived from the original on 25 June 2024. Retrieved 25 June 2024.
  25. ^ Manchanda, Harsh Upadhyay & Kunal (19 May 2022). "Exclusive: Wint Wealth raises nearly $15 Mn led by Eight Roads Ventures". Entrackr. Archived from the original on 25 June 2024. Retrieved 25 June 2024.
  26. ^ "Amidst Dismal Market Performance True Beacon's Impressive Debut". The Week Magazine (India). 25 February 2020. Archived from the original on 25 June 2024. Retrieved 23 March 2024.
  27. ^ "Introducing Zerodha Fund House". Zerodha. 30 October 2023. Archived from the original on 24 February 2024. Retrieved 16 June 2024.
  28. ^ Kaul, Abhinav (12 April 2023). "Kamath calling Kamath! Zerodha, Smallcase form JV to launch mutual fund house". Moneycontrol. Archived from the original on 12 April 2023. Retrieved 16 June 2024.
  29. ^ Dubey, Navneet (25 October 2024). "Nithin Kamath led Zerodha Fund House launches its maiden funds. Here are the crucial details". Business Today. Archived from the original on 25 October 2023. Retrieved 16 June 2024.
  30. ^ "Zerodha Fund House Achieves ₹1,000 Crore AUM in Record Time, Reflects Growing Interest in Passive Investing". Bru Times News.
  31. ^ "Zerodha Fund House AUM hits Rs 500 crore in 40 days, reaches Rs 1,000-crore mark". Business Today. 29 March 2024. Archived from the original on 25 June 2024. Retrieved 31 March 2024.
  32. ^ Claburn, Thomas (17 October 2024). "Manifest file destiny: Declare your funding needs via JSON". The Register. Archived from the original on 5 November 2024.
  33. ^ Sanghvi, Disha; Borate, Neil. "Will Zerodha compensate investor losses caused by tech glitch?". LiveMint. Archived from the original on 19 January 2023. Retrieved 23 March 2024.
  34. ^ "Zerodha server down due to connectivity issue, management clarifies". Money Control. 27 February 2019. Archived from the original on 25 June 2024. Retrieved 23 March 2024.
  35. ^ "Unplugged, Zerodha not to depend on leased lines". The Hindu Business Line. 3 May 2018. Archived from the original on 25 June 2024. Retrieved 23 March 2024.
  36. ^ "Zerodha's Kite platform faces technical issues". CNBC-TV18. 15 April 2019. Retrieved 23 March 2024.
  37. ^ Kaul, Abhinav (5 November 2020). "Some Zerodha traders peeved as Reliance Jio users face login issue". LiveMint. Archived from the original on 19 January 2023. Retrieved 23 March 2024.
  38. ^ Srinivasan, Sreshti (21 August 2024). "Zerodha To Halt Brokerage Referral Incentive Announces Nithin Kamath On X". NDTV Profit. Retrieved 22 August 2024.

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