Zerodha

Last updated

Zerodha Broking Ltd
Industry Financial services
FoundedAugust 2010;14 years ago (August 2010)
FounderNithin Kamath & Nikhil Kamath
Headquarters
Bengaluru, Karnataka
,
India
Services
RevenueIncrease2.svg₹83.7 billion (US$1.0 billion) (FY24) [1]
Increase2.svg₹47 billion (US$560 million) (FY24) [1]
Subsidiaries Zerodha Commodities Pvt. Ltd
Website zerodha.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]

Contents

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

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

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

In 2014, Rainmatter was founded as an early-stage fund with a corpus of ₹500 million (equivalent to ₹800 millionorUS$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

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

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

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

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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