Zerodha company is not going through good times these days. The company’s revenue is continuously falling. Zerodha’s co-founder and CEO Nithin Kamath has given this information. Nithin Kamath said that the company is currently facing stability in revenue, while it is set to decline significantly at the end of this year.
In a blog post, Nithin Kamath pointed to market regulator Sebi’s new regulations, which are expected to impact the brokerage’s business operations from October 1 this year. “We are already seeing stagnation in revenues and profit, and we are prepared for a big drop in revenues later this year. Sebi’s True-to-Label circular will go live on October 1, 2024. We expect a 10% revenue drop,” he said.
Moreover, a further regulation on index derivatives could result in a 30% to 50% reduction in revenue, he said, adding, “Index derivatives are a significant part of our revenue today, and any change will impact us.” Nithin Kamath also highlighted changes in the annual maintenance charges (AMC) under the new Basic Services Demat Account (BSDA) thresholds and said, “We may charge full AMC from clients with demat holdings of ₹10 lakh and above, while today it is ₹4 lakh. With the removal of account opening charges, this will be a meaningful drop in revenue.”
He said that Zerodha’s referral program has also suffered a setback due to the new guidelines of the stock exchanges, under which payments have been restricted to registered authorised persons only, as the number of referrals has come down from thousands to only a few registered participants due to this change. Despite all this, Nithin Kamath admitted that Zerodha is in a strong position in the market, although the road ahead is difficult for the company due to regulatory changes.
