Return on India · Colossus | Investing & Business Podcasts

Nithin Kamath - Building India’s Biggest Stockbroker

February 16, 2023·48 min·4 clips

How did Zerodha grow from 60,000 to 11 million users after India's digital onboarding shift in 2016?

India has two exchanges. Kamath begins with the plain operating detail: when customers place an order, they pick the National Stock Exchange or the Bombay Stock Exchange. That choice opens up the bigger point. In India, he says, exchange data comes free through brokers, so every customer sees the same feed. The brokerage app does not turn into a paid information ladder where better data goes to people who can afford it. Exchanges still get paid, just through small transaction charges on trades. Kamath likes that model. It sounds dull, but the incentives matter. Payment for order flow comes up next, and he is blunt about finding it ethically hard to defend. The host pulls those details into the risk side of the market: shorting rules, broker conduct, and lower leverage all change how Indian markets behave when global markets get messy. Trust gets its own turn. Kamath points back to the 2015 and 2016 case involving a large Indian broker that cheated with customer funds, after which the regulator tightened the rules and stripped away much of the leverage brokers could offer. Then the conversation reaches 2020, when digital businesses in India grew phenomenally. Zerodha comes through less as a victory lap than as a useful way to see how incentives, access, regulation, and digitization fit together.

As heard by us

A grounded look at how India’s market structure shapes brokerage, data access, and growth.

Nitin Kamath uses the conversation to show how India’s market structure shapes brokerage, data access, and leverage. The strongest stretches stay close to the mechanics: how exchanges in India make money through transaction charges, why every customer gets the same data, and how…

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Why you'd press play

You want the mechanics behind Zerodha and India's market structure, not a victory lap.

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