Zerodha CEO slams Groww's pivot to regular mutual funds
New Delhi, July 9
Zerodha founder and CEO Nithin Kamath on Thursday took a swipe at rival platforms on X after Groww, one of India's largest retail brokers by active users, began offering regular mutual funds through its subscription service Groww Prime.
In a social media post, Kamath said many platforms that launched direct mutual fund offerings around the time Zerodha introduced its Coin platform have since "disappeared or pivoted to something else."
Remaining competitors are "rethinking their choice of offering direct plans," he said, adding that "Zerodha will continue to offer direct mutual funds for free."
His remarks followed Bengaluru-based Groww expanding its product mix to include regular mutual funds on its subscription-based Groww Prime platform. The product, initially launched for a select set of users earlier this year, has now been rolled out to the company's two-crore customer base.
Groww had previously offered only direct mutual funds, claiming them to be a low-cost investment option that can generate better long-term returns by eliminating distributor commissions.
Kamath said that Zerodha's pricing philosophy has remained unchanged since it pioneered the discount brokerage model in 2010.
"When we started the discount brokerage model in India in 2010, we decided to charge the same fee regardless of trade size. The logic was simple: if the effort to execute a trade is the same, why should customers pay differently?" he said.
Kamath added that Zerodha's philosophy remained the same even after the launch of Coin, choosing to offer only direct mutual funds instead of charging commissions through regular plans.
"You can't call yourself a discount or a low-cost broker if you charge a percentage fee on transactions, because there's no incremental effort in executing a larger order," he said.
Kamath also urged investors to check if they are holding regular mutual funds, adding that Zerodha would help customers switch regular funds to direct plans if they opted so.
— IANS
Reader Comments
While I appreciate Zerodha's principled stand, let's not forget that regular MFs work better for some investors who actually need advisory support. Not everyone is a DIY investor like Kamath assumes. Different strokes for different folks, yaar. But yes, transparency matters.
Classic Nithin Kamath - always calling out the industry's BS. He's been consistent since 2010. Meanwhile, Groww raised billions in funding and now they're showing their true colors. Expecting retail investors to pay for something that was free? That's not innovation, that's a u-turn. 👎
As someone who uses both Zerodha and Groww, I think both have merit. Direct funds are great for experienced investors, but regular funds with proper guidance can be better for newcomers who might otherwise make costly mistakes. However, Groww should be more upfront about their pivot, not quietly roll it out.
Finally someone speaking truth in fintech world! All these startups start with "disruption" and end up following the same old commission model. Zerodha ka attitude is different - they actually mean what they say. Groww Prime subscription for something that used to be free? No thanks, bhai. 🚫
Interesting dynamics in the Indian fintech space. Kamath makes a valid point about consistency, but Groww's pivot reflects market realities - direct MFs alone may not be a viable long-term business model. The question is whether customers will accept paying for something they were getting for free. Time will tell.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.