Zerodha’s “₹0 brokerage” model applies exclusively to long-term stock delivery and direct mutual funds, serving as a zero-cost customer acquisition funnel. The firm generates massive profitability by monetizing active market activity through five core pillars:
- High-Frequency Trading Fees: A flat ₹20 fee on Futures & Options (F&O), intraday, and commodity trades, fueled by high-volume day traders.
- Float & Interest Income: Billions earned on interest from uninvested client funds held in bank deposits and clearing houses.
- Margin Lending (MTF): Interest charged to traders borrowing capital for leveraged equity trades.
- Depository & Tech Subscriptions: Per-transaction Demat debit fees (DP charges) alongside developer fees for Kite Connect API access.
Paired with a lean team of roughly 1,000 employees and virtually zero marketing spend—relying entirely on organic word-of-mouth and its educational platform, Varsity—Zerodha converts a dominant retail user base into exceptional net margins.
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