Zerodha IPO: CEO Nithin Kamath Hints at Listing Plans After Business Stability – What’s Next for the Discount Broker?

Zerodha, a leading discount brokerage firm, is considering the possibility of launching an IPO, but only when there is more predictability in its business. In a recent interview with CNBC-TV18, Nithin Kamath, CEO of Zerodha, shared the company’s thoughts on going public. Kamath stated that Zerodha’s interest in an IPO stems from being a top player in the industry. However, he clarified that they would only move forward with an IPO after expanding their business ventures and achieving stability.

Building Trust Without an IPO

When asked about trust and transparency for retail investors, Nikhil Kamath, Zerodha’s co-founder and CFO, explained that being a public company limits what can be disclosed to the public. He noted that other ways to build trust might be more honest than simply going public.

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Hesitancy Toward Going Public

Zerodha’s leadership, including Nithin, Nikhil, and CTO Kailash Nadh, expressed hesitancy about an IPO. Nikhil Kamath said the decision was “50:50, leaning more towards no IPO.” Kailash Nadh added that Zerodha’s ability to innovate and make decisions freely without needing outside capital is a big reason for not going public.

Adapting to SEBI’s New Regulations

Nithin Kamath also discussed new regulations from SEBI, India’s capital markets regulator, which requires stockbrokers to generate revenue only from brokerage services. Kamath acknowledged this change would be challenging for the industry but noted Zerodha is working on ways to adapt. He hinted that brokerage fees might increase as a result.

Future Focus on Business Diversification

The company, for now, remains undecided on its IPO plans, focusing on diversification and adapting to regulatory changes. Zerodha’s leadership is cautious about going public, weighing the pros and cons of such a move.