Priyanka Tiwari
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Online brokerage Zerodha has no intention of going public anytime soon, co-founder and CEO Nithin Kamath said during an interview with CNBC-Awaaz on March 26. He explained that the company does not require external capital and prefers to avoid the added scrutiny that comes with being a publicly listed entity. Kamath pointed out that Zerodha already operates in a heavily regulated industry and listing would impose additional obligations that don’t align with the firm’s core philosophy.
Kamath also highlighted that Zerodha regularly offers exit options to its employees through annual ESOP buyback programs. He expressed skepticism about the capital markets offering valuation multiples significantly higher than what Zerodha currently holds privately—suggesting a potential 1-2x increase at best, which is not compelling enough to pursue a public listing. However, Kamath did mention that if regulators ever mandate it, the company would comply.
Discussing market trends, Kamath noted that the rapid growth in retail market participation over the past decade has been especially pronounced post-COVID-19. He called the last 4–5 years one of the most active periods for retail investors, with a significant increase in capital market engagement.
Kamath also addressed the recent slowdown in futures and options (F&O) trading. He noted a sharp decline in options activity since October, attributing it to bearish sentiment and a market correction. Kamath explained that while half of futures traders are profitable, the options segment tends to lure traders with the illusion of quick gains, often leading to losses. He believes this six-month trend might continue in the short term but expects a revival in market activity if the current bounce-back sustains.
Zerodha has observed increased diversity in its user base post-pandemic, though most traders still appear concentrated in certain geographies, based on IP log-ins. Kamath acknowledged rising competition in the broking space but stressed that Zerodha’s unique philosophy keeps it ahead. Unlike others, the platform minimizes mobile app notifications and avoids spamming users, focusing instead on long-term value creation and responsible trading behavior. Zerodha also incorporates product nudges to discourage excessive trading—an uncommon approach among brokerages, according to Kamath.
He concluded by emphasizing that Zerodha’s operations are guided by a long-term vision rather than short-term growth pressures, ensuring that every decision aligns with their core values.
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