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The Success Story of Zerodha

Zerodha is India’s No.1 discount broker in terms of active retail clients. The discount broker has revolutionized trading and investing in India by eliminating heavy brokerage costs which were offered before its launch, which kept many aspiring traders off the line. Zerodha, a name emerging from a combination of two words: Zero and Rodha (Sanskrit word for ‘barrier’) has consistently kept increasing its client base. The users of Zerodha together contribute 15% of all Indian retail trading volumes.

Founded by two brothers- Nitin and Nikhil Kamath, Zerodha started its operations on 15th August 2010.
The aim was clear, to break all barriers that traders and investors face in India in terms of cost, support, and technology. It is India’s first discount broking service, thereby in India’s brokerage industry, it is recognized with bringing in a disruptive force.

As Zerodha is a discount broking firm, it provides its customers a platform just to trade and does not offer any professional services such as advisory and research recommendations. Therefore, its operational cost is very low compared to traditional brokers. It never spends any amount on advertising itself. If the operational costs are low, then the cost to customer would also be low, which is why Zerodha has low account opening charges and AMC compared to its peers. The business model is- ‘Low Margin and High Volume’.
Also, Zerodha is completely bootstrapped. This means that as a startup, it has been wholly funded by its founders and no funding as been made by any other private entity. It’s also a debt free company.

Active Users on Broking Top 5 Broking Platforms as of April 2021

The USP of Zerodha is its low brokerage model. If you are holding your stocks for more than a day, then trading is free for you. No brokerage is charged and you just have to pay the necessary taxes. Zerodha primarily earns from the brokerage generated by intraday and derivatives trading. Zerodha charges a flat Rs 20 per order brokerage on FNO trading.

Zerodha reported Rs 442.4 Cr profit for Financial Year 2020-21. Revenue stood at 1034.8 Cr from operations. Covid released a wave of new of rookie and millennial investors who wanted to try stock market investing and trading which benefitted many discount broking firms along with Zerodha.

Zerodha is now among with few unicorns with a profitable business and a Billion Dollar Valuation.

To promote innovations and fund startups, Zerodha started its own fintech fund and incubator: Rainmatter.
Some of the startups incubated at Rainmatter are Smallcase, Learnapp, Sensibull, GoldenPi and Wint Wealth.

If you want to open a demat account with Zerodha, click on this link.

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