Symbiosis Institute of Management Studies, Khadki,

Pune
EVALUATION SHEET
(COVER PAGE)

HOME ASSIGNMENT No: 1 (Internal)

[Compulsory Submission for Internal Evaluation]

Subject Code : 22448207 Subject: Strategic Management

Prof. Name: Dr. Vivek Sane

Course/ Program and Batch: MBA(Executive) Weekday Batch

PRN: 20020448121 Student Name: Sourabh Vijay Kulkarni

Date of submission: 25/02/2021

Submitted to: madhumitap0504@gmail.com Signature of Student:

Evaluation:

TOTAL
Question 1 2 3 4 5
(Out of 30)
Marks
Allotted

Evaluated by: _____________________________ Signature of Faculty ______________

Date: _______________2020
 Nithin Kamath- Zerodha
“Do not chase money, let it float towards you”, this is the famous quote from richest self-
made billionaires in India under 40 Mr. Nithin Kamath, the founder of financial firm
Zerodha.

August 15, 2010, Zerodha went live for retail trading. In just over 3 years, without spending
even 1 Rupee on advertisements, newspaper inserts, Google Ads, etc. Today zerodha have
over 6000000 customers contributing volumes of Rs 4000-5000 crores on various exchanges
daily. And on an average, they add almost 2 lakhs customers per month. The key ingredient
for their growth has just not been pricing but the fact that we have never compromised on
quality of service. An essential reason for this is because every client gets the same deal, and
this increases the efficiency in terms of sales and support. The rules remain the same be it a
client with Rs 1000 or 1 crore in the trading account.

How Zerodha started and their vision?

Nithin Kamath”, before establishing Zerodha, was working in the call center in the night and
he used to trade during the morning hours. At the age of 17, he got introduced to the stock
markets by his friend and since then he started trading. After trading for full time for over 10
years, this Maverick decided to become a broker when he thought that the time has come to
provide a different kind of stockbroking services that he never came across during the 10
years span of his trading. He felt digitization and online user-friendly platform are the need of
an hour when he first thought of starting Zerodha. Nitin Kamath also observed that the reason
why the young generation is not willing to start trading is that there are high brokerage
charges implemented on the transactions. His aim was to become an online broker using the
latest technologies that is more people-first than profit-first.

Business Model
Zerodha works on 'Low margin and high-volume model.' As already mentioned, Zerodha
charges a minimal amount for transactions because of which the trading volume is high. The
collection of small amounts from many clients leads to good revenue. Also, the operational
costs of Zerodha are quite low as compared to some of the top brokers. Its online structure
enables it to maintain low operational costs.

Strategies they used to build an empire:

Zerodha’s strategies evolved over time, but Nithin always believed that it is not the strategy
that makes money, it is everything one can do around it that does. One can have the best
strategy in the world, but still blow out with a bad money management strategy and similarly
with good money management skills one can make profits even from an ordinary strategy.
Nithin was inspired from Azim Premji, the founder of WIPRO.
 Name ZERODHA!!
Zerodha is derived from the Sanskrit word Rodha which means Obstructions. The name
Zerodha means ‘No Obstructions’. Hence, the founder aimed at providing a hassle-free, low
brokerage trading platform. He targeted clients who are young and more tech-savvy to
contribute to the capital market ecosystem. According to him, he wanted more of a Google-
like platform with a simplicity to use rather than a Yahoo-like platform.

Not a single Rupee on advertising, no marketing team

They are 76th most popular website in India and 1031st popular in the world. All this without
ever spending a single Rupee on advertising or having a marketing team. They have never
advertised, which cannot be said of their competition who have large budgets for online,
print, and TV advertising. The quality of our products and the goodwill they have earned
from our clients is why they are the largest broker in India today.

Charging Per Executed order fees:

In today’s market scenario with advancement in technology the cost of executing a trade for a
brokerage firm does not go up with the size of the trade. What this means is that if Ram
bought 1 lot of options and Sham bought 10 lots, both in 1 order, Zerodha as a brokerage firm
does not incur extra costs for Sham over Ram. The logic was that if the costs does not go up
with the size of the order, then why should brokerage?  Hence, they decided on a fixed fee of
Rs 20 per executed order irrespective of size or contract. To help smaller volume equity
traders they decided to offer either 0.01% or Rs 20 whichever is Lower. 

Discount Broking
Discount Broking, originated in US and how most of the developed markets trade today.
Etrade, Ameritrade, Zecco etc. are the pioneers and discount brokerages contribute to over
80% of the market turnover in the US. The bet behind starting Zerodha was that with the
entire online revolution of FB, online shopping portals etc. it was about time India had its
own true discount broking firm. A brokerage firm which is online, offering a fast, reliable,
and advanced trading platform, excellent support and at the lowest costs because of the
reduced overheads.

Innovation and New Additions:

To stay competitive, the firm launched many products to expand its reach and to overcome
some challenges they were facing. Below is a brief on what each product provides:

 Console: It is a central dashboard of a customer’s account with Zerodha that will

provide in-depth reports and visualizations to get more insightful idea.
 Kite: It is a sleek trading and investment platform using the latest technologies. It
eases the customer’s experience to trade and transact in the stock market.
  Kite Connect API: This is mainly focused on independent traders and startups to
enable them to build an innovative trading and investment platform. Using
algorithms, retail traders can automate their trades.
 Sentinel: A platform that enables you to create market alerts. The alerts can be
customized based on price, trade quantity, and open interest. The interesting aspect of
this product is that you do not need to be a Zerodha customer in order to use Sentinel.
 Z Connect: This is a blog facility regarding stocks, trading, and investment with
Zerodha. They publish articles and information on this blog and any user is allowed to
ask questions and post comments.
 Varsity: One of the challenges faced by this firm was that it lacked in providing
research services to its customers who are sometimes clueless about what and when to
buy or sell. To overcome this, they come up with Varsity that gives a vast collection
of stock market lessons on the go.
 Coin: It provides a commission-free purchase of mutual funds directly delivered into
the customer’s Demat account.
 Rainmatter: It is an incubator that provides funding as well as mentorship to start-up
companies in capital markets and gives minority stake in exchange.

Closing Thoughts:
Nithin strongly believes in not running after the money but to do the right things for a long
period of time. This is what is the reason his firm has become one of the top-most broking
firms in the country over the eight to nine years of time. To add to that, after facing so many
challenges, the firm has made its way to persistently increase its customer base year by year.