Nithin and Nikhil Kamath-led Zerodha has rapidly expanded its lending operations since starting operations in 2023
In 2020, Zerodha launched its NBFC venture, Zerodha Capital
However, until recently, Zerodha Capital has been primarily focused on capacity-building efforts
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Nithin and Nikhil Kamath-led stock broking platform Zerodha, which kicked off its lending operations last year, currently claims to have a book size INR 112 Cr, as it plans to amplify its product offerings over the next few years and diversify its loan book at a quick pace.
“We only really started lending operations in 2023 and are currently at a book size of 112 crores,” Zerodha said in a recent blog post.
In 2020, Zerodha launched its NBFC venture Zerodha Capital with an aim of assisting users in establishing robust credit profiles and providing access to lower-interest rate loans to facilitate repayment of more expensive loans.
However, until recently, Zerodha Capital has been primarily focused on capacity-building efforts.
The company plans to include 653 securities across stocks and mutual funds, eligible for pledging to avail a loan from Zerodha Capital.
In 2023, Zerodha also announced the launch of its maiden mutual funds — Zerodha Nifty LargeMidcap 250 Index Fund and Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund, months after receiving the final approval from the markets regulator Securities and Exchange Board of India (SEBI) for its asset management company.
“We believe that while we’re doing everything we can to allow and simplify direct investments in the capital markets, it is paramount to have easy-to-understand products for the masses to increase the overall participation in and depth of our markets. So, we got an AMC license and built the Zerodha Fund House as a joint venture with smallcase,” the company said.
Going forward, Zerodha plans to roll out advanced features, including Realtime Nudges for live P&L-based alerts and orders, Nudge Assist for actionable insights on trade deviations.
Besides, it has other product updates in pipeline such as Alert Triggers Basket for executing orders on alert triggers, Trade from Option Chain for an enhanced order execution experience and Lumpsum Equity SIPs that auto-adjust based on lumpsum amounts, among others.
Zerodha, founded in 2010 by the Kamath brothers, is a bootstrapped discount brokerage that allows users to trade in stocks and invest in mutual funds. The Bengaluru-based invest tech startup generates revenue from brokerage sales, user onboarding collections, and the sale of its premium tech products such as Kite Connect API.
Zerodha’s net profit rose 37% to INR 2,908.9 Cr in FY23 from INR 2,120.3 Cr in the previous fiscal year as the business continued seeing strong growth.
Its operating revenue grew 37% to INR 6,832.8 Cr in FY23 from INR 4,977.3 Cr in the previous year. Of this, fees and commission charges accounted for 84% at INR 5,727.2 Cr. In FY22, Zerodha earned INR 4,128.9 Cr from fees and commission charges.
Zerodha’s rival Groww, which also turned profitable in FY23, is also diversifying its product offerings. Last year, Groww rolled out UPI payments feature on its broking app. In May 2023, Groww also acquired the mutual fund business of Indiabulls Housing Finance for a consideration of INR 175.6 Cr.
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