Zerodha Brokerage- How does it cover cutting grounds?
Zerodha is a company that offers financial services based in India. It offers retail and institutional booking; currencies and commodities trading are also performed by the company. The headquarters of the company is in Bangalore but has a branch in major cities in India.
In 2019, the company is the largest retail stockbroker in the country by an active client base and also contributes upwards of 2% of daily retail volumes across the country’s stock exchange. In June 2020, the company joined the unicorn club and has a self-valuation of about $ 1 Billion. The valuation is based o ESOP buyback exercise.
The Goal Of The Company Was To Reach New Heights
The company started operations on the 15th of August, 2010. They had a goal of breaking barriers when it came to traders and investors in the country. They deal with cost, support,and technology. Today, the company’s disruptive pricing models and in-house technology has made them one of the best and biggest brokers in terms of active retail clients in the country. Over two million is the number of orders that the company receives daily through its powerful ecosystem of investment. They also run open online education and community initiatives that empower retail traders and also investors.
Recently the company plans on having employee stock ownership plans (ESOPs) buyback with a self-assessed enterprise value of Rs 7,000 crore. The discount brokerage firm would spend Rs 60-65 crore for the buyback, primarily intended to give “liquidity” to its employees as it nears a decade since its founding. “It’s been a decade since we started. We have not raised any capital and don’t have any intention to raise for the next few years. So, we thought this was a good time to give liquidity to people who have been around with us for a while,” Nithin Kamath, founder, and CEO of Zerodha said.
How It Is Dealing In New Market
Zerodha is planning to foray into global investing and has partnered with a US-based brokerage company to allow global equity exposure to its client. The project is currently in the pipeline and undergoing.
The retail activity in the last three-four months has picked up and not just in India, but in other markets across the world. Various factors have enabled this. One, that people are working from home so they have more time in their hands to think about their finances. The second is that interest rates around the world have crashed therefore; the money in the bank is not yielding you as much, so people are looking at alternatives. Three, there has been a lot of interest in the bounce back because the stocks had fallen so much that it all looked inexpensive.
The company was adding 70,000 to 1 lakh, new customers before the COVID-19. The month of March was the biggest month for them, as they added about 3 lakh accounts. Now, they are averaging between 1.5 to 2 lakh new customers a month. Therefore, adding new customers almost 100 percent more than what the company was adding in the pre-COVID days.