Zerodha's zero-brokerage bet hits F&O curbs: first revenue decline, 40% brokerage drop

Zerodha, founded by brothers Nithin and Nikhil Kamath in Bengaluru in 2010, built India's largest discount broking franchise on a simple price bet: charge a flat ₹20 or 0.1% per trade and charge nothing at all for equity delivery, then make money on volume, ancillary products and discipline. In August 2015 it waived delivery brokerage entirely, a move Kamath says was meant to shed the image of 'a broker just for speculation' and pull first-time investors in.

The model compounded for a decade. Zerodha stayed private, avoided advertising, and claims its pricing saved investors ₹2,000–20,000 Cr in brokerage between 2016 and 2025 while competitors were forced to match its fees. FY24 revenue reached ₹9,994.5 Cr with profit of ₹5,493.4 Cr, and the company counted over 7 million active clients.

The equation changed from October 2024, when Sebi moved to curb speculative trading in futures and options: STT on options rose, stock exchanges stopped rebating transaction charges to brokers, weekly expiries were cut, and market activity cooled. Zerodha had earned about 10% of its revenue from exchange rebates alone. FY25 became the first year in the company's history with a revenue decline — down 11.2% to ₹8,868.2 Cr, with net profit down 23% to ₹4,236.7 Cr — and in Q1 FY26 brokerage revenue fell roughly 40% year-on-year.

On Zerodha's 15th anniversary in September 2025, Kamath published a long post blaming the regulatory clampdown and saying 'the time has finally come for business to pivot.' He warned that if weekly options are banned outright, Zerodha would be forced to start charging brokerage for equity delivery trades — reversing the very policy that made its name — since most rivals already charge for delivery.