Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Zerodha.
The boom of the stock market has been skyrocketing since the 200o's. Imagine a player coming in and letting the traders trade barrier-free. Yes! That has been a reality with Zerodha since 2010. Zerodha was founded by brothers Nithin and Nikhil Kamath.
Headquartered in Bengaluru, Zerodha is a financial service company and a member of NSE, BSE, MCX, MCX-SX that provides brokerage facilities to the stock market traders. All in all, Zerodha is an online discount broking company that aims to lower the costs for their clients, something that is crucial in deciding the long-term profitability of the trader trading in the stock markets of the country.
Read about Zerodha Business Model, Revenue, Profit, Competitors, Revenue Model, Founders, Growth, How Zerodha Works and more., in the article ahead.
Zerodha - Company Highlights
| Company Name | Zerodha |
|---|---|
| Headquarters | Bangalore |
| Industry | Finance, Stock Exchanges |
| Founders | Nithin Kamath, Nikhil Kamath |
| Revenue | $333.68 Million ( around Rs 2,500 crores in FY21) |
| Net Profit | $133.48 Million (around Rs 1000 crores in FY21) |
| Funding | Bootstrapped |
| Valuation | $1 Billion+ (June 2021) |
| Founded | 2010 |
| Website | zerodha.com |
Zerodha - Latest News
November 1, 2021 - Zerodha creates a new ESOP pool for its employees. Under its fresh ESOPs Plan 2021, the company allocates around 7,00,000 options, as per the regulatory filings of the company with the Registrar of companies (RoC).
Zerodha - About and how it works
Zerodha - Founders and Team
Zerodha - Rainmatter Foundation
Zerodha - How did it start?
Zerodha - Startup Launch
Zerodha - Business Model and Revenue Model
Zerodha - Revenue and Profit
Zerodha - Logo and Tagline
Zerodha - Startup Challenges
Zerodha - Competitors
Zerodha - Growth
Zerodha - Future Plans
Zerodha - FAQs
Zerodha - About and how it works
Zerodha basically works on the idea of discount broking, which means that it charges a reduced commission or low brokerage on the transactions to ideally attract the investors to use this platform. This makes Zerodha famous amongst the traders and is the main reason behind Zerodha having a client base of more than 1 million, thereby making it the largest stockbroker in terms of clients.
Zerodha has got the first-mover advantage as it was the first discount broker in the country. “Zerodha was incorporated to make trading, barrier-free, so is its name Zerodha i.e., No Obstructions” says Nithin Kamath. One another important reason for the highly surging growth of Zerodha is that it puts in constant efforts and keeps coming up with innovative ideas and unique strategies that have helped Zerodha in getting an edge over its rivals.
Chayanika Goswami
Zerodha - Founders and Team
The founders of Zerodha are two brothers namely Nithin Kamath and Nikhil Kamath.
Nithin is the founder and CEO of Zerodha. Nikhil is the younger one amongst the brothers and is a brilliant trader. At Zerodha, he manages the prop trading desk, risk management and everything related to trading. As of today, Zerodha has a team of over 1300 employees.
Jeenal Jain
Zerodha - Rainmatter Foundation
In January 2021, Zerodha set up Rainmatter Foundation, a non-profit foundation that aims to support individuals/organisations/companies working towards problems related to climate change. Rainmatter Foundation has committed a $100 million fund towards the above directions.
As the head of Rainmatter Foundation, Sameer Shisodia (Founder of The Farming Collective and Linger Leisure) is working towards this collective goal. The Foundation has invested in Terra (online climate school training climate entrepreneurs on climate science, policy, business, social justice), and Blue Sky Analytics (Provides real-time and predictive environmental intelligence)
Zerodha - How did it start?
The founder and CEO of Zerodha, Nithin has been trading in the Indian stock market since the age of 17. Nithin attended an engineering college and then went on to become an entrepreneur. During his college years, he spent considerable time trading in the stock market. And that forced him to take up a job at the call-center. Hence he worked at the call center during the night and saved the day time for trading. “I did this, working-trading, for almost 3 years during 2004-5, post which, I quit my job when I got my first client who asked me to manage money for him after looking at the positive returns on my trading account,” says Nithin Kamath.
In a very short span, Nitin got more such clients through referrals and then went on to become a sub-broker with Reliance Money when it was launched. At Reliance Money, Nitin was one of the most successful sub-brokers, breaking volumes of more than 1000 sub-brokers at once. “But as a trader, I was still finding something missing with the way RMoney was working, not really what a trader requires. That is when we decided to start Zerodha,” added Nithin.
Zerodha - Startup Launch
After the founders, Nikhil and Nitin found Zerodha, it took a long time for them to establish the market standing. It was a slow transition that happened over the last decade. Zerodha, in its first year, opened 3,000 accounts. In India, when the cost of any product or service is less, people generically start questioning the quality. And that was the biggest milestone for Zerodha founders to conquer. As a result of which, they build a community which also helped them in the long run. Even today Zerodha doesn’t spend any money on advertising.
The focus on building a community for the traders helped Zerodha. This was because the initial doubts of the traders towards Zerodha’s discount broking model was stemming from the fact that retail investors were often clueless about what stocks should be bought or sold, did not ideally offer any research services. To counter this challenge, Zerodha launched Varsity. Varsity is a learning module which became immensely popular. It ran Trading Q&A, an active forum where traders and investors were able to discuss stock ideas.
Over time, Zerodha used technology heavily to differentiate itself from the rest in the market. Its trading platform named Kite on web and mobile today account for more than 10% of all retail trading turnover in the country. Zerodha also went on to launch Coin which is an online platform to buy mutual funds directly.
Zerodha - Business Model and Revenue Model
The business model of Zerodha works on a 'Low margin and high-volume model.' Zerodha charges a very minimal amount to the traders for transactions because of which the trading volume is generally high. This fee collection of smaller amounts from a larger number of clients leads to good revenue generation for Zerodha. Also, one more factor aiding high-profit margins for the company is the operational costs. They are quite low for Zerodha as compared to some of the top brokers because of its online structure which allows it to maintain low operational costs.
Zerodha has finally got approval from the SEBI (Securities and Exchange Board of India) to offer mutual fund services, said Zerodha co-founder Nithin Kamath via his Twitter handle. The company had applied for the license of the same in February 2021. This will help Zerodha to launch its asset management company (AMC and is surely another feather in its cap.
“Passive, simple, cheap index-traded funds will be on offer. Mutual fund products need to be simplified to attract investments from young investors,”
said the co-founder and CEO of the brand, Nithin Kamath.
Ashwini
Zerodha - Revenue and Profit
Zerodha’s core broking business reported revenue of INR 1093 Crore in FY2020. Zerodha had a profit of INR 592 Cr in FY2020, as per the financials for Zerodha Broking Limited.
The company has reportedly doubled its revenue for the FY21, where it has mopped up revenues close to Rs 2,500 crores. The profits for the company also increased to Rs 1,000 crores, as of November 2021.
Zerodha has got a total client base of more than 1.6 million, Zerodha earned revenue of INR 850 crores in the financial year 2019. The claimed net profit on this revenue was INR 350 crores in 2019
Zerodha - Logo and Tagline
"The Free Trade Zone" is the tagline of Zerodha. It conveys the brand's primary differentiator of brokerage-free trading in clever fashion.
Zerodha - Startup Challenges
Certain challenges faced by Zerodha are:
- Technical glitches on the platform because of heavy trading which leads to decreasing customer satisfaction.
- The customer support mechanism of Zerodha is not that efficient as compared to other top brokers in India.
- Important Fact materials like Daily reports, Quarterly result analysis, news alerts, etc. are not provided by this platform unlike some of the other top brokers.
Zerodha - Competitors
Zerodha faces some cut-throat competition in the market. It is competing with other discount brokers like Upstox. Simultaneously, Zerodha also faces serious competition from full-service brokers which are huge and popular amongst the traders such as HDFC Securities, Kotak Securities, Motilal Oswal, etc.
Chayanika Goswami
Zerodha - Growth
- Dethroned the market leader- ICICI Securities with nearly 8.47 lakh active clients
- Conducts 2-3 million trades every day
- Zerodha is the largest retail brokerage firm across the world
- Adds 50,000 to 75,000 accounts every month
Zerodha - Future Plans
Upcoming goals for Zerodha is the aim to add 5-10 million new investors of the Indian stock market with the aid of the platform. "India is very dependent on foreign capital to drive the country. For any country to do well, you need residents to put their money in the market. The money shouldn't just stay in fixed deposits and real estate. I want to encourage people to educate themselves and put the money in the ecosystem in some way or the other to drive growth," Nithin concluded.
Zerodha is currently looking to reduce the transaction costs down in its discount brokerage services. The company will be launching low-cost funds in order to attain that target, as per the reports dated September 1, 2021.
Zerodha - FAQs
Who are the founders of Zerodha?
The founders of Zerodha are two brothers namely Nithin Kamath and Nikhil Kamath.
What is Zerodha?
Zerodha is a financial service company and a member of NSE, BSE, MCX, MCX-SX providing brokerage facilities to the stock market traders. It is an online Discount Broking company.
Who are the Top Competitors of Zerodha?
Zerodha's top competitors are :
- Upstox
- SAS Online
- IIFL
- Finvasia
- Angel Broking
- Beeline Broking
- TradingBells
- Karvy Stock Broking
- Sharekhan
- Motilal Oswal
- HDFC Securities
- ICICIdirect
How does Zerodha make money?
Zerodha charges a very minimal amount to the traders for transactions because of which the trading volume is generally high. This fee collection of smaller amounts from a larger number of clients leads to good revenue generation for Zerodha.
How much is Zerodha's Revenue?
Zerodha has got a total client base of more than 1.6 million, Zerodha earned revenue of ₹850 crores in the financial year 2019. The claimed net profit on this revenue was ₹350 crores in 2019.
What is Discount Broking?
Zerodha works on the idea of discount broking, which means that it charges a reduced commission or low brokerage on the transactions to ideally attract the investors to use this platform.
Author: Vidhi Punamiya
Source : https://startuptalky.com/zerodha-trading-services/
Date : 2021-11-01T08:14:00.000Z
Well explained.
ReplyDeleteSBI share price