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Nearly 150 years ago, a handful of stockbrokers would meet under banyan trees in the heart of Mumbai to talk shop. As they grew in numbers, these traders were eventually forced to move to a place known today as Dalal Street (literally “broker street”), home to Asia’s oldest stock market.
Despite all that history, generations of Indians – including me – have been taught to liken investing in stocks to gambling. Opening a trading account in the country also took tons of paperwork.
However, a few months into the Covid-19 pandemic, some of my friends were suddenly talking on social media about the money they were making from trading stocks. These posts were often accompanied by an obligatory quote or two from The Big Short, a film about the 2008 global financial crisis.
Part of it made sense: Stocks looked like an attractive place to park idle money when bank interest rates were plummeting. At the same time, much of the credit also goes to online brokerages like Zerodha, which had spent years building a system so that anyone with two thumbs and a smartphone could trade stocks in just a couple of days.
In 2015, Zerodha introduced its zero-brokerage-fee model, which shook up the decades-old broking industry. The Bengaluru-based company hasn’t raised any external funding, but relied only on word of mouth and its in-house tech to become India’s top stockbrokerage.
The fintech unicorn became a lodestone for many millennial investors who crowded into the market while it was booming amid the pandemic, but CEO Nithin Kamath doesn’t think such growth can go on forever. He said candidly that Zerodha’s fortunes are linked to the market and could take a hit when it cools off.
While he may yet be proven right, online brokers are definitely here to stay. If you’re into stocks and capital markets, invest your time reading about what makes Zerodha tick.
— Arpit Nayak, writer at Tech in Asia
Top stories this week
Image credit: Timmy Loen
1️. Trial by fire awaits Zerodha, India’s hottest stockbroking app
Zerodha has gained from booming markets and a surge in new investors. But while its CEO is bullish about the future, he fears that a bubble may pop soon.
2. An SG gaming firm’s breakout moment after years of quiet success
Virtuos, with over 2,500 employees in 14 markets, finds virtue in staying behind the scenes. But with a US$150 million raise, it’s entering the limelight.
3. Soonicorn Social Bella doubled its revenue in 2020
The company also said that its registered users went up 2x from its pre-pandemic numbers.
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