Zerodha Considers Equity Delivery Charges Amid Revenue Slump
Zerodha, India's leading retail stockbroker, is facing a revenue slump due to recent policy changes. The firm may introduce charges for equity delivery trades, marking a departure from its zero-brokerage model. Meanwhile, co-founder Nithin Kamath reassures investors about the company's long-term focus.
Zerodha's revenue decline can be traced back to several regulatory changes over the past year. Notably, a steep hike in securities transaction tax (STT) on options and restrictions on weekly contract expiries have significantly impacted the firm's income. In response, Zerodha is considering a shift in its business model by charging for equity delivery trades for the first time.
The decision is driven by a 40% drop in brokerage income, primarily due to regulatory changes targeting high-volume derivatives trading. However, co-founder Nithin Kamath acknowledges the short-term revenue impact but maintains a long-term perspective. He emphasizes the importance of focusing on long-term growth over short-term numbers to uphold Zerodha's customer-first ethos. The firm is also bracing for a fresh revenue hit due to potential regulatory curbs on weekly options, although the exact timing for these restrictions has not been publicly disclosed.
Zerodha's revenue slide, attributed to regulatory changes, may lead to the introduction of charges for equity delivery trades. Despite the short-term impact, co-founder Nithin Kamath remains committed to a long-term focus, prioritizing customer interests over immediate financial gains. The firm continues to navigate potential regulatory curbs on weekly options, with the exact timeline yet to be announced.
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