Nikhil Kamath and his brother Nithin Kamath launched Zerodha, India’s most extensive stock trading business by volume, and both brothers were included on Forbes’ list of India’s 100 wealthiest people in 2020. Nikhil Kamath, the younger brother, recently discussed his upbringing, schooling, and development of Zerodha in an interview. He explained how he became unsatisfied with conventional learning methods while in school, started a business at 14, and finally founded the company.
Nikhil Kamath, the co-founder of Zerodha, says, “Becoming a millionaire does not alter that—I still work 85% of the day.”
Nikhil Kamath’s first work was at a call centre when he was just 17 years old. Kamath, now a millionaire, began trading stocks on a salary of Rs 8.00 per month and only began taking it seriously a year later. He currently heads the most profitable stock brokerage business in the nation.
The co-founder of Zerodha explained how his father handed him part of his funds and ordered him to “handle it” before he started stock trading seriously and moved the family to H.uaens 2f Bombay.
Nikhil Kamath said, “He basically had blind confidence.”
He then succeeded in convincing his contact centre supervisor to follow suit. “Since it benefited him, he shared the strategy with his peers. Because I was in charge of the team’s budget, I was eventually labelled “present” even though I never showed up to work. “There was also what Kamath said. “Then, in 2010, my brother and I founded Kamath Associates, and in 2012, we introduced Zerodha,” he said.
Was it always Kamath’s intention to create a stock trading company, given that he never finished high school? There is no easy yes or no to this question.
“After dropping college, I had no goals but to make money. I was raised in a standard middle-class household; my relatives had MBAs, so I was often asked something like, “What is he going to do with his life?” “In his words. However, he had the support of optimistic parents. “The only advice I got from my parents was, “Do not do anything that embarrasses us too much!” Somehow they concluded that I was also clever since I was excellent at arithmetic. They had a ludicrous amount of confidence in me.” Said Kamath.
The co-founder of Zerodha shared some of the insights he has gained from his work so far: “I dropped out of high school and have since worked at a contact centre, for Zerodha, and for True Beacon, where I have been able to focus on the two or three areas at which I excel. Even after becoming a billionaire, I still work eighty-five percent of the time and deal with the constant fear of “What if it’s taken from me?” “So my only advice is to not sweat about this stuff; five years from now, the things you’re worrying about now will not matter; therefore, why not do what you have to do today and have “stupid faith” that it will work out… somehow?” ” Kamath elaborated.
Zerodha Success Story in Stockbroking Industry in India.
Everyone is interested in trading and investing, but few take the plunge for many reasons, such as a lack of expertise, high commission and brokerage fees, market volatility, and so on.
The worst global financial crisis ever hit between 2008 and 2010, causing a worldwide trade pause. Although there was a need for stockbroking services in India, the few remaining firms had fallen on hard times and relied on antiquated methods and tools. Many members of today’s younger generation lack the necessary educational background to consider trading at such a tender age.
Zerodha, a discount broking business located in Bangalore and started in 2010 by Mr. Nithin Kamath, offers traders low brokerage fees and a straightforward, trustworthy interface despite these challenges, which practically every broker shares in India. This company has over 2.5 million active users, which is a huge success.
The founding of Zerodha: How did it start?
Before starting Zerodha, Zerodha co-founder “Nithin Kamath” worked nights at a call centre and mornings in the markets. His buddy introduced him to trading stocks when he was 17.
Although he had accumulated a sizeable fortune via stock trading, he lost it all in the market meltdown of 2001 and 2002. He was given a large sum of money by a foreign HNI and tasked with managing it over time. He eventually became a sub-broker for Reliance Money, where he brought in many lucrative new accounts.
However, during the second market fall amid the global financial crisis in 2008-09, they lost a large amount of money again. After ten years of full-time trading, this Maverick decided to switch careers and become a broker so that he could provide investors with the type of stockbrokering services he had never seen before.
When he originally had the idea for Zerodha, he realized that digitalization and an easy-to-navigate internet platform were urgently required. Nitin Kamath also noted that the hefty brokerage fees associated with trading discourage new investors and significantly younger people. His goal was to establish himself as a cutting-edge, client-oriented internet broker.
The Sanskrit word rodha, which means “obstacles,” is the root of the term zerodha. Zerodha is a word that refers to a state of being in which there are no barriers in the way. As a result, the company’s first goal was to provide a trading platform with little friction and reasonable commissions. He specifically sought younger, more tech-savvy customers who may positively impact the financial markets.
What he really wanted, he said, was something like Google, where everything was straightforward and easy to use, rather than Yahoo. When he realized that something had to be done, he and his younger brother Nikhil founded Zerodha, and the rest is history—or, more accurately, a case study for everyone.
The Secret Formula of Zerodha’s Success
There is, however, no easy way to achieve one’s goals. When Nithin Kamath established his discount brokerage company, he made the conscious decision to provide clients services that made good use of both cutting-edge technology and reasonable prices. He saw a significant time gap between the fees other brokerages charged and the money clients actually got.
It was also Nithin’s opinion that the prevailing technology was antiquated, therefore he developed a novel trading platform to make internet commerce less daunting for ordinary people. The notion of charging a little fee came to him when he considered offering cheap services.
He hoped this would entice younger investors, who are generally put off by trading’s high entry barrier but whom he was eager to win over. He created his company with this goal in mind, and it is now the industry leader in bargain broking. He thinks the day India becomes economically powerful is not far off if we do not rely too much on foreign finance and instead invest in our own enterprises.
Unexpectedly, the company hardly invested on promotional activities. There are no commercials on their website. “Word of mouth is your genuine marketing,” the entrepreneur says. As a result, Zerodha was able to attract a sizable clientele while keeping its operational expenses low.
If you keep shares for more than a day, his brokerage business will let you trade for free. Futures, options, and intraday trading all have a fixed cost of Rs. 20, which is how they earn their money.
While this is based on a percentage of a deal, most of the competition charges far more. Based on a “low margin, high volume” business approach, it aims to maximize sales rather than maximize profits.
