For over a decade, Zerodha has transformed India's brokerage industry by waiving brokerage fees for equity delivery trades. This bold move has saved investors between ₹2,000 crores and ₹20,000 crores in brokerage fees over the years. Despite market pressures and a significant drop in options trading volumes, Zerodha has maintained its zero-brokerage stance, reaffirming its commitment to retail investors.
The Power of Zero Brokerage: Data Insights
In a recent statement, Zerodha’s founder, Nithin Kamath, reiterated the firm's commitment to keeping equity delivery free. The data below, sourced from Zerodha’s internal analysis, showcases the immense brokerage savings that investors have benefited from:
Brokerage Saved by Investors at Zerodha (Year-wise Data)
2016: ₹279 crores (0.3% No Cap), ₹51.2 crores (0.1% No Cap), ₹22.9 crores (0.1% or ₹20 per trade)
2017: ₹445.4 crores (0.3% No Cap), ₹93 crores (0.1% No Cap), ₹30.5 crores (0.1% or ₹20 per trade)
2018: ₹1,931.1 crores (0.3% No Cap), ₹643.7 crores (0.1% No Cap), ₹44.9 crores (0.1% or ₹20 per trade)
2019: ₹3,436.9 crores (0.3% No Cap), ₹1,145.6 crores (0.1% No Cap), ₹51.6 crores (0.1% or ₹20 per trade)
2020: ₹2,900.2 crores (0.3% No Cap), ₹1,213.1 crores (0.1% No Cap), ₹416.8 crores (0.1% or ₹20 per trade)
2021: ₹3,639.4 crores (0.3% No Cap), ₹2,375.6 crores (0.1% No Cap), ₹358.6 crores (0.1% or ₹20 per trade)
2022: ₹7,126.8 crores (0.3% No Cap), Data not available for 0.1% No Cap, ₹624.8 crores (0.1% or ₹20 per trade)
2023: ₹1,005.6 crores (0.3% No Cap), ₹335.2 crores (0.1% No Cap), ₹85.8 crores (0.1% or ₹20 per trade)
Key Takeaways from the Data
If investors had paid 0.3% brokerage with no cap, they would have spent a staggering ₹21,305 crores in brokerage fees.Under a 0.1% brokerage model, total brokerage savings would have been ₹7,101 crores.Even with a 0.1% or ₹20 per trade model, investors have collectively saved around ₹2,195 crores over the years.These numbers emphasize the massive cost advantage Zerodha has provided to retail investors, enabling them to reinvest savings rather than lose them to brokerage fees.
Why Zerodha Sticks to Zero Brokerage
Despite rising competitive pressures and shifting market trends, Zerodha has remained firm in its decision to keep equity delivery brokerage-free. Kamath acknowledges the industry-wide decline in options trading volumes, which poses a financial challenge. However, the company's long-term vision remains centered around lowering barriers for investors rather than focusing solely on immediate profitability.
Interestingly, Kamath also clarified a common misconception—Zerodha does not mean "Zero Brokerage". Instead, it is derived from "Zero + Barriers" (in Sanskrit), symbolizing the company's mission of making investing accessible and affordable for all.
The Bigger Picture
Zerodha’s decision to eliminate brokerage for equity delivery has forced traditional brokers to rethink pricing strategies. Many discount brokers have followed suit, leading to:
- Increased retail participation in the stock market.
- Greater financial literacy among investors.
- Higher long-term savings and reinvestment potential.
However, sustaining a zero-brokerage model is not without its challenges. As market conditions evolve and derivatives trading revenues fluctuate, it remains to be seen how long Zerodha can continue this model. For now, though, Zerodha remains committed to its core philosophy—zero barriers for investors.
Zerodha’s zero-brokerage policy for equity delivery has proven to be a game-changer for Indian investors. Over the years, the company has helped traders save thousands of crores in brokerage fees, reinforcing its role as a disruptor in the Indian brokerage industry.
Even as market pressures mount, Zerodha's unwavering commitment to keeping equity delivery free showcases its dedication to empowering retail investors. This initiative has not only saved money but also encouraged more people to participate in the stock market, ultimately fostering a healthier investment ecosystem.