How is Zerodha minting money while the rest are in losses?
Zerodha, is a Bangalore-based fintech/financial services business that offers low-cost retail stock brokerage services as well as additional options for trading in bonds, currencies, and commodities. As Zerodha charges minimal fees for transactions, trading volume is generally high. The collection of smaller amounts from a larger number of clients results in good revenue generation.
Zerodha is consistently committed to pursuing the goal of eliminating brokers from the world, which will greatly benefit stakeholders involved in the financial markets. Additionally, the business is similarly dedicated to delivering the finest customer experience possible with the aid of highly customizable support and services. Zerodha hopes to establish a world without brokers.
To attract investors to use this platform, the organization essentially operates on the principle of discount broking, which entails charging a low commission or cheap brokerage on the transactions. Because of its reputation among traders, Zerodha has amassed a user base of more than 9 million, making it the largest stockbroker in terms of customers.
As the country's first bargain broker, Zerodha has the first-mover advantage. Zerodha CEO Nithin Kamath explains that Zerodha was established to remove obstacles from trading, hence the name Zerodha, which means no obstructions. Another significant factor in Zerodha's explosive growth is the company's ongoing efforts, inventive concepts, and distinctive business tactics, all of which have given Zerodha an advantage over its competitors.
Since its founding in 2010, Zerodha has accomplished several noteworthy milestones. The company claims to have bootstrapped itself to unicorn status by June 2020 without even seeking investment from any investors. Additionally, Zerodha is credited for purchasing ESOPs for almost 4X their book value, which occurred right around the time the stockbroking business thought of itself as a unicorn.
In the market, there is fierce rivalry for Zerodha. Upstox and other bargain brokers are its rivals. Meanwhile, full-service brokers like HDFC Securities, Kotak Securities, Motilal Oswal, and others that are well-known and huge among traders pose a severe threat to Zerodha.
Zerodha's future goals include using the platform to bring 5-10 million new investors to the Indian stock market. The economy of India is very dependent on foreign investment. For a country to develop, its people must put their money into the market. The funds shouldn't just be put into fixed deposits and real estate. To promote growth, "I want to inspire people to learn new things and put money into the ecosystem to encourage growth," said Nitin Kamath, CEO of Zerodha.
Kautilya, IBS Mumbai.