Meet India's Most Successful Brokerage Entrepreneur

Nithin Kamath, the founder and CEO of Zerodha, is one of the world’s most innovative entrepreneurs. His company is the largest online discount brokerage in India, a product of a career heavily invested in the nuances of the financial markets.

Kamath recently chatted with Benzinga to talk about his story, Zerodha and the future.

A Roller Coaster Trading Career

Before he was able to drink or vote, Kamath was trading stocks. He began at the age of 17 and found success early. Despite some lofty goals on the horizon, the 2001 recession hit his portfolio hard.

“I went all the way to zero. I lost the earnings that I made,” said Kamath. “I ended up working at a call center until I could trade again with clients.”

Once he was able to find a client to trade for again, he left the call center. Eventually, he had enough referral and success to become a sub-broker with Reliance Money and start trading with his brother, Nikhil.

Together, the brothers executed successful shorts during the 2008 financial crisis. The returns were enough for Kamath to leave Reliance Money and start reaching his goal of owning a discount brokerage that gives more to the customer.

“I enjoyed Reliance Money, but felt like I could do something better. The discount brokerage space was on the horizon, and I saw an opportunity to leave the trading desk to start a brokerage.”

Kamath said his short before the 2008 crisis helped propel his vision of Zerodha into existence.

“The capital we made off that short is not a fraction of the possibility that came from that opportunity, but it was enough. We were able to buy a seat on the exchange and start getting things going.”

In 2010, Zerodha was launched. The decision to begin a discount brokerage catered to all investors was all hands on deck for Kamath, who stopped trading in pursuit of starting Zerodha.

A Solution For Investors

Zerodha is what many nowadays may think of when they about discount brokerages. It's the largest in India, with over a million clients and 2-3 million trades executed per day on its platforms.

Its products center around a mobile and desktop platform for users to study the markets, evaluate data and make trades at affordable rates.

How did Zerodha become the behemoth it is today? For Kamath, a key catalyst is its flat fee for all trades. Also, its platforms, which were built by the company’s tech team headed by Dr. Kailash Nadh and introduced a new kind of user experience that has since been emulated in the expanding discount brokerage space.

“When we started, we understood that we needed to give a flat fee for traders. We wanted to make it as affordable as possible. We were one of the first,” he said. “For someone trading on Zerodha, it’s only 20 rupees, or about 30 cents, for any trade you do. It’s almost nothing.”

Along with supplying low rates, Zerodha’s services are a perfect balance of simplicity and sophistication. Its main web and mobile trading platform, Kite 3.0, is brought to users in a easy-to-navigate interface. Kamath noted that this is imperative to the product’s success.

“We have built a product which caters to both passive investors and extremely active day traders, while keeping the experience clutter free by yet very powerful.”

Future Plans For Expansion

Zerodha only allows users to trade on India’s top exchanges. Looking ahead, Kamath explained there are plans to expand to allow Indians to invest in U.S. stocks.

“I think that users would be excited to go buy stocks on the NASDAQ. People like to invest in things they use. If you use an iPhone, you might want to invest in Apple Inc. AAPL. If you use Amazon, you might want to buy Amazon.com, Inc. AMZN. That’s something we think our users would enjoy.”