Nithin Kamath Founder/CEO of Zerodha, discusses the uniqueness of Zerodha and rise of online trading in Punjab & Haryana.
Trading in shares has been on the rise in India over the past few years. But what has emerged in the process is the trend of online trading, especially with the penetration of broadband in the country. Nithin Kamath, founder and CEO, Zerodha, an online trading firm, talks to Girja Shankar Kaura.
Q. What is the genesis of Zerodha?
A. I started trading at a very young age and have traded actively with many brokers for more than 12 years. But I realised that there was a gap between what a brokerage firm offers and what a trader wants. This is when the idea of Zerodha was born, a brokerage firm that caters to online traders by having both the platform and support completely online.
Since the support is completely online, we could pass the pricing advantage to the client and also increase the efficiency of service. What we offer is internationally known as online discount broking. The idea behind is that in today’s online world, the cost of executing a trade doesn’t go up with the size of the trade.
Q. What is your USP, key differentiation?
A. We are members of all the major exchanges — NSE, BSE, MCX-SX, MCX and NCDEX. We provide our customers with trading/demat accounts to trade on all of these exchanges. Our major differentiation is our pricing, we charge a flat fee of Rs 20/trade irrespective of the size of the trade. There is no commitment required from the client in terms of minimum turnover/contract note charges, software fee or any kind of upfront brokerage. And since we have a single plan for all our clients, we can be completely transparent about our business online and hence also provide much more efficient support.
Q. How are you revolutionising the online trading platform in India?
A. Before Zerodha was launched in India, the only option for a retail client was to pay percentage brokerage. And the costs, which are already high, keep going up higher with the increase in trade size. We have been the catalyst for change to match India with what is happening internationally by charging a flat fee per trade irrespective of the trade size. In less than 3 years from when we started, we have over 27,000 clients and contribute an average of around Rs 3,500 to 4,000 crore on the exchanges, putting us among the top brokerages in the country. We have been the fastest growing brokerage in the nation — all of this growth came at a time when most other brokers were reducing their business size due to the perceived recession in the global economy.