Zerodha

Zerodha turned 16 this month. Sweet 16. Every year, I write to our customers about the business and how we’re thinking about the future. The last couple of years have been mixed for brokers. We took revenue hits due to regulatory changes, and the Indian market peaked in September 2024. Volumes steadily declined after that, and growth has been muted. So while the bull run may not have ended, it has definitely taken a pause. Internally, though, there’s a bull market in our enthusiasm. Despite all the growth over the last 10 years, our team has remained roughly the same. Our core team across tech, product, business, and operations remains small. This helps us move faster, and AI has given us another boost in how quickly we can iterate on products and ideas. There’s serious work happening across Kite, Coin, Console, and our other products. Our NRI experience has improved significantly, and the latest SEBI consultation paper, if it goes through, will make investing for NRIs easier than ever. There’s also work going into US investing. Our content initiatives across Zerodha Varsity, Markets by Zerodha, and Zero1 by Zerodha continue to get a lot of love from investors. Through Rainmatter by Zerodha and the Rainmatter Foundation, we continue to support startups, individuals, and organisations trying to solve significant problems for India and humanity. The fall in market activity has meant fewer new people entering the markets. But our customers’ AUM continues to grow. We are now the largest broker in India by AUM, and that’s the number that matters to us. It’s also a sign of the trust customers place in us. That being said, one area continues to worry me: MTF, or margin trading funding. Our MTF book has now grown to about ₹9,000 crores. Leverage gives you a boost when things are good. But when things go bad, they can get bad really, really quickly. Indian markets are still shallow, and liquidity can evaporate quickly in a fall. We are already heavily dependent on F&O activity. Add leverage through MTF, and a sharp downturn can become a double whammy. This is why we have spent years making Zerodha resilient to whatever may come. We’ve diversified through Zerodha Capital, the Zerodha Fund House, and Rainmatter investments. But ultimately, what matters most is the promise we made when we started. The philosophy remains the same from day one: don’t do unto others what you don’t want done unto you. For us, that means not pushing or peddling unsuitable products. No triggering customers to trade or do things that may be bad for them. It means not annoying customers or doing anything that could cost us their trust, even if doing the right thing means taking a revenue hit. Pretty much everything about Zerodha has changed over last 16 years. The philosophy, and the promise we made to you, haven’t. Thank you for all the love over the years. Here’s the full update: https://lnkd.in/dAB7Mwd7