New Delhi: Bengaluru based online trading platform Zerodha has received stock market regulator SEBI's in-principle approval for starting a mutual fund and asset management business, Zerodha's founder Nitin Kamath announced on Wednesday. Discount brokerage firm which was founded by Nitin Kamath and his brother Nikhil Kamath in 2010 is the third firm to receive SEBI's AMC licence in recent times. Prior to Zerodha, SEBI had approved AMC licence for Bajaj Finserv and Samco Securities last month.
“So, we just got our in-principle approval for our AMC (MF) license. I guess now comes the hard part,” Nitin Kamath announced in a tweet. The online trading platform offers investment options in stocks, derivatives, mutual funds and other instruments. Zerodha had applied for the AMC licence in February last year.
Nitin Kamath had then said that the mutual funds as a product needed to be reimagined so that its investor base can be expanded from the current base of some 1.5 crore odd investors by attracting millennials those who don't invest into mutual funds. “For all fintech startups focusing on investing (including us), this is the real market size - a subset of 5.78 crore. 1.5 cr already invest, so >25% of the target audience. We can't look at 130 cr Indians and assume only ~1% penetration,” Kamath had said in February 2020.
Zerodha's entry into India's Rs 35 lakh crore mutual fund industry is expected to further intensify the competition as a sizeable number of new investors are looking to invest into the stock market through the mutual fund route as stock markets are at a record high and investment into the stock market through a mutual fund is considered a less risky option.
