Zerodha, India’s biggest discount brokerage firm, appears set to disrupt the mutual fund business. Zerodha’s Founder and Chief Executive Office Nithin Kamath on Wednesday announced that the corporation has received in-principle approval from the capital markets regulator for their AMC (Mutual Fund) license. Zerodha had applied for the similar in February of 2020. Zerodha is the country’s biggest brokerage firm with more than 15% of the industry share, beating classic and established brokerage firms such as ICICI Securities and HDFC Securities.
While announcing the news of Zerodha acquiring approval from capital markets regulator SEBI (Securities and Exchange Board of India) for AMC business enterprise, Nithin Kamath quoted his earlier tweet on the matter clearly outlining the discount brokerage firm’s plans for the mutual fund business. “To grow the capital market participation from the current 1.5 crores and address those who currently don’t invest (Millennials), we think mutual fund as a product needs to be reimagined,” Nithin Kamath had mentioned in February last year.
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Currently, Zerodha presents its customers the alternative to invest in mutual funds straight by way of its Coin platform, which was launched in 2017. Coin is a cost-free platform with practically Rs 5,500 crore in assets beneath management (AUM), according to a variety of reports. Through Coin, Zerodha presents investors the alternative to invest in direct mutual funds, eliminating the distributor commission.
Zerodha entered the stockbroking business in 2010. The corporation has garnered the biggest consumer base, supplying discounted brokerage services at Rs 20 per order. Zerodha’s eye-catching pricing method attracts more than 60 lakh customers to location orders on its platform. Zerodha claims to handle more than 15% of all India trading volumes. With the mutual fund license in location, Nithin Kamath aims to enhance investor participation in Indian markets.
“For all fintech startups focusing on investing (including Zerodha), this is the real market size – a subset of 5.78 crore. 1.5 crore already invest, so more than 25% of the target audience. We can’t look at 130 crore Indians and assume only ~1% penetration,” he had earlier mentioned. Currently, about 44 mutual fund homes in India have more than Rs 35 lakh crore worth of assets beneath management.