Latest news with #Zerodha
Time of India
3 hours ago
- Business
- Time of India
Nithin Kamath: Why the broking business isn't as glamorous as it seems
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Zerodha co-founder Nithin Kamath has offered a candid assessment of the hidden risks in India's broking business—particularly what he calls a 'massive concentration risk' that the market rarely talks a post on X, Kamath recalled a conversation with a veteran from private equity who had evaluated a broking firm in 2008 but backed out. 'The revenue was concentrated in just a handful of clients,' the investor had said—something that spooked them. At the time, a very small group of traders generated most of the exchange turnover. 'This was a lot worse back then,' Kamath forward to today, and while the number of retail traders has increased, the problem hasn't gone away—it has only shifted shape. 'For us, it's over 80%,' Kamath said, referring to the share of Zerodha's revenue that comes from just two F&O contracts: Nifty and Sensex. He added that this trend is true for most brokers in a risky dependence. 'That means one change can wipe out a big chunk of our revenues,' he makes it worse, Kamath pointed out, is the lack of alternative revenue levers in India. There's no payment for order flow (PFOF)—a controversial but lucrative practice in countries like the US. Cryptocurrency trading is largely off the table. And new rules such as quarterly fund settlement, which require brokers to return all unutilized funds to customer accounts every quarter, add operational stress.'I wonder why the brokerage business looks so sexy from the outside,' Kamath reflection is a rare public unpacking of how regulatory limits, market behaviour, and structural dependencies create a fragile business model—even for India's most successful brokerages.
Economic Times
3 hours ago
- Business
- Economic Times
Nithin Kamath: Why the broking business isn't as glamorous as it seems
Zerodha co-founder Nithin Kamath has offered a candid assessment of the hidden risks in India's broking business—particularly what he calls a 'massive concentration risk' that the market rarely talks about. ADVERTISEMENT In a post on X, Kamath recalled a conversation with a veteran from private equity who had evaluated a broking firm in 2008 but backed out. 'The revenue was concentrated in just a handful of clients,' the investor had said—something that spooked them. At the time, a very small group of traders generated most of the exchange turnover. 'This was a lot worse back then,' Kamath noted. Fast forward to today, and while the number of retail traders has increased, the problem hasn't gone away—it has only shifted shape. 'For us, it's over 80%,' Kamath said, referring to the share of Zerodha's revenue that comes from just two F&O contracts: Nifty and Sensex. He added that this trend is true for most brokers in India. That's a risky dependence. 'That means one change can wipe out a big chunk of our revenues,' he makes it worse, Kamath pointed out, is the lack of alternative revenue levers in India. There's no payment for order flow (PFOF)—a controversial but lucrative practice in countries like the US. Cryptocurrency trading is largely off the table. And new rules such as quarterly fund settlement, which require brokers to return all unutilized funds to customer accounts every quarter, add operational stress.'I wonder why the brokerage business looks so sexy from the outside,' Kamath quipped. ADVERTISEMENT His reflection is a rare public unpacking of how regulatory limits, market behaviour, and structural dependencies create a fragile business model—even for India's most successful brokerages. (You can now subscribe to our ETMarkets WhatsApp channel)
Mint
3 hours ago
- Business
- Mint
Zerodha CEO Nithin Kamath shares pitfalls of broking business, wonders: Why the brokerage business looks so sexy
Nithin Kamath, the co-founder and chief executive officer (CEO) of discount broking firm Zerodha, recently highlighted the risks of running a broking business, which often appears attractive on the surface — fast-growing revenues, rising trader numbers, and increasing volumes. The 45-year-old entrepreneur warned the broking business faces massive concentration risk—where a single change can wipe out a big chunk of revenue. 'I wonder why the brokerage business looks so sexy from the outside,' he quipped. In a social media post on X on Friday, June 20, Nithin Kamath shared an anecdote wherein he said that back in 2008, a private equity veteran decided against investing in a broking firm due to a glaring issue: revenue was highly concentrated among just a handful of clients. This concentration risk was a major red flag, signaling vulnerability to client attrition or market shifts. "As I've mentioned numerous times, a small number of active traders contribute to most of the exchange turnover. This was a lot worse back then. Fast forward to today, it's still concentrated, but in a different way," Kamath's post read. One might wonder that with the active clients on NSE rising steadily (to 49.2 million in fiscal 2025), these risks must be dissipating, but Kamath claims the situation remains largely similar. "While the number of traders has gone up, but for both exchanges and brokers, the bulk of revenue now comes from just two contracts: Nifty and Sensex F&O. For us, it's over 80%, and it's similar for other brokers as well," Kamath said. This means any regulatory change, market disruption, or shift in trading behaviour affecting these contracts could wipe out a substantial portion of brokerage income overnight. Kamath, however, wonders if this risk is factored in when brokerage businesses are valued. Adding to these risks is the unique Indian regulatory environment, which differs starkly from global markets, as highlighted by Kamath. India does not permit payment for order flow, a practice common in the US that can provide additional revenue streams for brokers. The prohibition limits brokerage firms' ability to diversify revenue sources. Additionally, the quarterly fund settlement mandate — requiring brokers to return all client funds to their bank accounts every quarter — imposes cash flow constraints and operational challenges, akin to a forced 'bank run' scenario. There is also no significant exposure to emerging asset classes such as cryptocurrency, which in other markets offers new growth avenues. Against this backdrop, Kamath wonders what makes the broking business look "so sexy from the outside". Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Time of India
a day ago
- Business
- Time of India
Is Zerodha's secret ingredient the homemade dishes that billionaire Kamath brothers' mother prepared for them?
No Outside Food, No Exceptions Raising Two High-Energy Sons Discipline That Lasts Zerodha co-founders Nithin and Nikhil Kamath are among India's most well-known self-made billionaires. But behind their success lies a lesser-known influence—their mother, Revathi Kamath. Recently, she shared how her strict focus on nutrition and home-cooked food played a consistent role in raising her sons, sparking curiosity about how much that discipline contributed to their a Facebook post, Revathi Kamath recalled how she never allowed food from outside into their home while raising her children. Every meal was made fresh, including juice and fruits, and not a single day was skipped. She noted that a good portion of the family's earnings was spent on buying quality ingredients to ensure her sons ate healthy food who followed her parenting journey also shared their memories in the comments, with one former colleague of her late husband mentioning the home-packed meals Revathi sent daily. She responded warmly, confirming that her approach to food was always detailed and has been candid about the difficulties of raising Nithin and Nikhil. In an earlier Facebook post, she said her life shifted entirely after marriage—her first son was born just ten months later. Seven years on, Nikhil arrived. Both boys, she noted, were not easy to manage, and parenting was far from routine. According to her, every day brought new plans to share more of this journey in her upcoming autobiography, which will cover not just the family's milestones but the emotional and daily struggles that shaped them. In her words, the book will reflect what went into bringing up 'unconventional kids' who would later build one of India's most valuable fintech she stayed deeply involved in her sons' upbringing, Revathi Kamath also built a professional life. She launched a floral decoration business with a Rs 5,000 loan and eventually grew it into a major event planning firm. Later, she took on environmental work, planting over a lakh trees and reviving the Somanahalli Lake—a project that helped replenish the groundwater table in the March this year, Nithin and Nikhil gifted their mother a Rs 1.5 crore Mercedes GLS. She shared the moment online with a picture and message of gratitude. The post came shortly after she had performed a Kannada film song at a Bengaluru event—marking her return to something she once story adds an unexpected dimension to the Kamath brothers' rise. While their success is often credited to bold business moves and financial discipline, their early years—marked by structure, homemade meals, and involved parenting—likely played a quiet but critical role. Whether or not it's the 'secret ingredient,' it's clear that those habits left a lasting impact.
Hindustan Times
a day ago
- Lifestyle
- Hindustan Times
Nithin and Nikhil Kamath's mother says she raised sons with ‘nutritious food': ‘Never ever ordered outside food'
Revathi Kamath, mother of billionaires Nithin and Nikhil Kamath, has been sharing nuggets on how she raised her two sons and the challenges she faced along the way. The veena player, who recently shared a video of her grandson on the mrudangam at an event in Bengaluru, took credit for the healthy, homemade meals she offered her sons when they were young. She added that the family did not order food from outside during those years In a Facebook post, Revathi said many of her friends on the platform had witnessed her parenting journey firsthand. "So many of my friends who are here on Facebook witnessed me bringing up my SONS, how nutritious food I used to prepare," Kamath wrote. "Never ever used to order outside food and not a single day I missed making fresh food, fresh juice and fruits. We used to spend lots of our earnings in all these." Several people commented on the mother's candid post, appreciating her efforts. One among them was a woman who worked with Kamath's late husband in Bengaluru. Revathi Kamath thanked the woman and reminded her of the food she she used to pack for her husband. 'You might have seen the food I used to send him daily,' Kamath told the Facebook user in the comments section. (Also Read: 'They were not normal kids': Nithin and Nikhil Kamath's mother shares struggles of raising two children) Revathi Kamath recalling that she never ordered food from outside for his sons while they were growing up is noteworthy as earlier this year, Nikhil Kamath had sparked an online debate on eating out vs cooking meals at home with a detailed post comparing the eating habits of people in Singapore and India. In March, Revathi Kamath was gifted a ₹1.5 crore Mercedes GLS by her sons, who are the co-founders of Zerodha 'My sons today gifted me new car today and here also I received car keys this way and one more Peta and shalu," she had written in a social media post, with a picture of her receiving the car.
