Before 2010, every Indian brokerage made its money from commissions. Every trade, no matter how big or small, had a charge of 0.3% to 0.5%. A ₹1 lakh stock purchase meant ₹300 to ₹500 were taken as brokerage.
In 2015, Zerodha made a decision that seemed risky at the time. Equity delivery trades would have zero brokerage. Not low. Zero. Intraday and F&O trades would cost ₹20 per order, whether the trade was worth ₹10,000 or ₹1 crore.
Over nine years, that decision cost Zerodha ₹25,620 crore in possible income. If it had charged the 0.3%, that money would have been its. It decided not to take it.
So how does it stay in business?
the revenue structure: what sits outside brokerage
Brokerage is part of Zerodha’s income, and its share is getting smaller. In FY26, broking income was ₹2,738 crore, down 10.7% from the year. The drop happened because exchanges stopped giving rebates, which took transaction fee income from ₹400 crore to zero.
Two other areas carry the weight.
Interest income. This comes from interest on money that clients do not use and from margin trading loans. In FY26, interest income was ₹2,269 crore, almost the same as broking income.
Margin trading facility (MTF). Introduced in December 2024, it reached ₹9,000 crore in size by FY26 and contributed about 10% of revenue. Clients had borrowed ₹6,000 crore, which is a quarter of Zerodha’s net worth. Nithin Kamath himself said the speed of growth “scares” him, because leverage can cause losses if the market drops a lot.
A smaller source is the account maintenance charge (AMC), which brought in ₹18 crore in FY26.
The revenue model in one line: the trade itself does not make money. The money is in client cash and in the need for financing.
the choice not to raise capital
Zerodha has never taken outside money. No venture capital, no equity, no big investor. The two founders own 100%.
That makes it unique in fintech. Groww got a lot of money to grow users, Angel One is listed, Upstox has backing. Zerodha has none of that.
The freedom that comes with that choice is something Nithin Kamath has explained clearly. With no investors waiting on growth numbers, there is no income target to meet. That is why the company can keep prices low, avoid messages that push users into trading, and refuse to charge users different prices.
He has also said that there is another side. If the company spent a lot on ads and user rewards, it would need to find ways to get that money back. That is where compromise starts. Not taking money means not needing to compromise.
The cost is growth. FY26 income stayed the same as FY25, and net profit went up 1.2%. In July 2026, Zerodha’s active users dropped by 38,725 to 6.76 million.
from a trader’s tool to an investor platform
Zerodha’s users were mostly active traders. The Kite platform was built for speed, simplicity, and no distractions. No flashy tips, no nudges to trade, no “this stock is up 120%, buy now” pop-ups.
The type of user has changed since 2016. Today, 80% to 85% of Zerodha’s clients are cash-market and mutual fund investors, not traders. Their needs are different. They want research, data, and tools for long-term holdings, not a tool for trades.
Zerodha’s answer has been to invest in Tijori, a research platform, with $5 million. Tijori is building AI-based analysis tools, and its target users are expanding from retail to institutions. Zerodha’s Coin platform already connects to every AMC’s direct mutual funds.
There is a bigger picture behind all of this. India’s retail investor base grew from about 3 million in 2020 to nearly 12 million by early 2022, and has since gone up to 110 million. Nithin Kamath says India Stack helped a lot: Aadhaar identity verification, DigiLocker document storage, and UPI payments. Those three parts made opening a trading account take minutes instead of paper forms and repeated rejections.
Zerodha was one of the first to benefit from that system, and one of the ones pushing it forward.
how the competitive landscape has changed
Groww overtook Zerodha in users in 2025. As of July 2026, Groww had 13.12 million users with a 28.88% share, while Zerodha had 6.76 million and 14.88%.
Zerodha’s overall size is still about twice that of Groww. FY26 revenue was ₹8,847 crore against Groww’s ₹4,644 crore. Net profit was ₹4,283 crore against ₹2,083 crore.
User numbers and profit numbers are two different measures. Groww got first-time investors and those in smaller cities with lower barriers and a simpler look. Zerodha has fewer users but makes more per user and keeps assets longer. Kamath said in the FY26 report that by HNI assets under management, Zerodha is now India’s largest broker.
what retail investors can take from zerodha’s model
Zero brokerage does not mean zero cost. The trade has no brokerage. STT, stamp duty, exchange fees, GST, and DP charges still apply. A ₹1 lakh sell order can cost ₹200 to ₹240 in fees, most of which go to the government, not the broker. Zerodha gave up its share, not the user’s cost.
A company that does not take money does not need to please investors. That shows up directly in the user relationship. No growth target means no reason to push users into trades, unsuitable products, or data selling. Twenty-five to thirty percent of Zerodha accounts come from existing users. Trust is its most expensive asset and the one it guards most carefully.
Revenue structure affects a broker’s goals. If brokerage is the source, the platform benefits when users trade more. Zerodha’s brokerage part is getting smaller while interest and loan income grow. That structure affects long-term investors and short-term traders differently. It is worth thinking about before choosing a platform.
Size is not always the important number. Zerodha has 6.76 million users, Groww has 13.12 million. Zerodha’s profit is twice that of Groww. User count is one number. Revenue quality and asset retention are two others.
FAQs
1. How does Zerodha make money?
Mainly through interest income and margin trading. FY26 broking income was ₹2,738 crore, interest income was ₹2,269 crore. MTF added about 10% of revenue. Equity delivery trades have zero brokerage, so the money does not come from commissions.
2. Does Zerodha really charge nothing?
Equity delivery trades and mutual fund investments have no brokerage. Intraday and F&O trades have a ₹20 per order. Account maintenance is free for the first year, then ₹300 plus GST annually for non-BSDA accounts. Sell-side costs like DP fees, STT, and stamp duty still apply, because those are government charges, not broker fees.
3. Why has Zerodha never raised money?
Because without investors, there is no need to report growth numbers or meet income targets. Nithin Kamath has said this is what allows the firm to keep prices low, avoid pushing users into trades, and avoid using user data for money. The trade-off is growth. FY26 income and profit were nearly flat.
4. Why is Zerodha’s user growth slowing?
Market activity dropped after the September 2024 peak, and tighter F&O rules affected revenue that depended on derivatives. In July 2026, Zerodha’s active users fell by 38,725. Groww added about 70,000 in the same time, increasing the gap.
5. How is Zerodha different from Groww?
Groww has more users, 13.12 million against 6.76 million, but Zerodha makes more, ₹4,283 crore profit against ₹2,083 crore. Groww focuses on first-time investors and simpler looks. Zerodha’s users keep assets longer and it has higher AUM. The two platforms have different income structures and target different audiences.
