Zerodha CEO: 'Historically, market crashes caused panic but this crisis...'
The most underappreciated aspect of building a successful business is just how important being at the right place and the right time is, said Nithin Kamath
PremiumZerodha CEO Nithin Kamath on Thursday shared how Covid crisis was different from other financial crises for stock markets. He also shared the reasons behind the sharp spike in customer base of Zerodha during the pandemic.
"The last 18 months at Zerodha have been eventful, to say the least. Historically, market crashes caused panic and reduced activity. But this crisis led to a rush of new customers looking to buy into stocks on sale. Free time due to lockdowns and low bank deposit rates helped," he said.
He further said that once the younger bunch of first-time investors saw quick profits, they started spreading the word and got their friends and family to invest. "Market outperformance has led to continued momentum in user growth until now. It all felt like magic, we did nothing different," he added.
Kamath, however, said that the most underappreciated aspect of building a successful business is just how important being at the right place and the right time is. "All you can control is how you build your team and hence the products. Everything else is pure randomness and luck," he added.
Zerodha pioneered discount broking in the country a decade ago and now has become the largest player with over 6 million customers. It more than doubled its net income and revenue to ₹1,000 crore and ₹2,500 crore, respectively in FY21, according to PTI.
The startup, which was launched by brothers Nithin and Nikhil Kamath with their own funds, had ₹1,093 crore in revenue and earned a profit of ₹442 crore in FY20.
Of the over 6 million customers, more than 3.7 million were added in FY21 alone. Kamath said 70-80 per cent of the 3.7 million new customers were in the 25-35 age bracket.
In an interview to PTI, Nithin Kamath recently said that the discount model works because of the cost efficiencies — something any other startup founder would love to do but cant do. "One of the biggest advantages is that we don't need to have a physical presence across the country and hire people to man those branches. And being fully digital also brings in tremendous cost and operational efficiencies," Nithin said.
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