Zerodha CEO Nithin Kamath Warns: Free Equity Delivery Trades May End as Revenue Falls 40%

India’s largest online brokerage, Zerodha, may soon introduce charges for equity delivery trades — a feature that has been free since its inception. CEO Nithin Kamath warned that the platform’s long-standing zero-brokerage model may no longer be sustainable amid tightening regulations and a steep fall in revenue.

In a blog post marking Zerodha’s 15th anniversary, Kamath revealed that the company’s brokerage revenue fell by 40% in Q2 FY25 compared to the same quarter last year. The sharp decline, he said, was triggered by a series of regulatory changes that have disrupted the industry’s core revenue streams.

Regulatory Headwinds Hit the Core Business

Kamath attributed the revenue slump primarily to changes impacting futures and options (F&O) trading, which has been Zerodha’s largest revenue contributor.

Higher Securities Transaction Tax (STT) on options trading

Reduction in weekly options expiries

Withdrawal of exchange transaction charge rebates

Increased limits for Basic Services Demat Accounts (BSDA)

New ASBA (Application Supported by Blocked Amount) mechanism for trading

“These changes have hit our primary revenue stream — active options trading,” Kamath wrote. “The time has finally come for the business to pivot.”

He described the situation as one where “the risk has crystallised,” noting that the combination of lower trading activity and higher compliance costs could permanently alter the industry’s economics.

Free Delivery Trades Under Review

While rivals such as Angel One and Upstox already charge for delivery-based equity trades, Zerodha has maintained a zero-fee policy for years, helping it attract a massive retail user base.

However, Kamath cautioned that this model might not be viable in the current regulatory climate. “If these headwinds continue, we may have to re-evaluate our stance on free delivery trading,” he said, without confirming a timeline for the change.

Strong Balance Sheet, No Debt

Despite the profit pressure, Kamath assured investors and users that Zerodha remains financially robust. The company, he noted, has a net worth of ₹13,000 crore, operates with zero debt, and maintains more than 50% of client funds using its own capital.

He reaffirmed that Zerodha’s growth strategy remains grounded in transparency, ethical design, and privacy-first principles. “We’ve consciously avoided dark patterns and intrusive data practices — something that remains a core part of our philosophy,” Kamath wrote.

Cautious Optimism Ahead

Known for his conservative outlook on markets, Kamath admitted that despite his repeated warnings about a slowdown, the firm continues to perform above expectations.

“Another year where I was pessimistic about the business has passed — and I’ve been pleasantly surprised again,” he wrote. But he warned that the future will require a fundamental shift in strategy to navigate shrinking margins and regulatory uncertainty.

As India’s brokerage landscape undergoes its biggest transformation in years, Zerodha’s potential move to charge for delivery trades could mark a significant departure from the discount-broking model that helped democratize investing for millions of retail traders.

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