India’s largest stockbroking platform, Zerodha, is contemplating a major shift in its business model by potentially introducing brokerage fees for equity delivery trades. This comes as the company faces revenue pressure following a government crackdown on the futures and options (F&O) segment, which has been a major contributor to Zerodha’s earnings.
In a blog post commemorating Zerodha’s 15th anniversary, cofounder and CEO Nithin Kamath expressed concerns over the company’s declining revenues for FY25 and Q1 FY26. While exact financial figures for FY25 are yet to be disclosed, Kamath shared a revenue trend chart that indicates a noticeable dip in earnings during the recent fiscal year.
Weekly Options Ban Could Reshape Zerodha’s Revenue Model
Kamath highlighted that the bulk of Zerodha’s revenue comes from the high-volume F&O trading segment. However, with regulators reportedly evaluating the possibility of banning weekly options—a popular product among retail traders—the company could see a significant impact on its core revenue stream.
“The options business might be at further risk, with the regulators evaluating whether to stop weekly options completely,” Kamath wrote in the blog post. “If this were to happen, we would be forced to start charging brokerage for equity delivery trades to make the business tenable.”
This would mark a historic change for Zerodha, which has, since its inception in 2010, offered zero brokerage on equity delivery trades—one of its key USPs (unique selling points) that helped it become the leading discount broker in India.
Regulatory Changes Affecting Retail Participation
The government and market regulator SEBI have been tightening rules around derivatives trading to curb excessive speculation and protect retail investors from potential losses. Over the past year, changes such as increased margin requirements and stricter eligibility criteria for F&O participation have led to a decline in trading volumes.
Zerodha, like many other brokers, has been directly affected by this downturn. As a platform that thrived on volume-based trading and low-cost services, the reduced activity in the options market is forcing the company to reconsider its “zero brokerage” business model.
A New Chapter for India’s Most Popular Broker?
If implemented, the move to charge brokerage on equity delivery trades could have ripple effects across the Indian broking industry. Zerodha’s zero-brokerage model was widely adopted and emulated by other discount brokers, making it the industry standard. Changing this approach could not only alter Zerodha’s brand identity but also impact investor sentiment and customer retention.
However, Kamath emphasized that the company is not making this decision lightly and will explore all avenues to maintain affordability for its user base.
As regulatory dynamics evolve and revenue pressures mount, Zerodha may need to innovate beyond pricing to sustain growth and profitability. Whether the company can adapt to this new landscape while retaining its loyal customer base remains to be seen.
Keywords: Zerodha brokerage charges, equity delivery fees, Nithin Kamath blog, F&O trading ban, Zerodha FY25 revenue, weekly options regulation, SEBI F&O crackdown, discount broker changes India
