Zerodha founder and chief executive Nithin Kamath has reiterated the company’s commitment to offering direct mutual funds without charging investors, amid discussions around Groww’s expansion into regular mutual fund plans through its Groww Prime service.
In a post on X, Kamath explained that Zerodha’s pricing philosophy has remained unchanged since the company introduced the discount brokerage model in India in 2010.
Kamath explains Zerodha’s pricing philosophy
“When we started the discount brokerage (flat fee per trade) 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?” Kamath wrote.
He said the company applied the same principle to mutual funds and waited until it could exclusively offer direct plans before entering the segment.
“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. This logic has informed all our product and pricing decisions from day one,” he added.
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Kamath claimed Coin by Zerodha is currently the largest direct mutual fund platform in India, managing nearly ₹1.6 lakh crore in direct mutual fund assets.
“Direct mutual funds are a no brainer if you’re a DIY investor,” he said, adding that Zerodha would continue to offer direct mutual funds for free.
He also urged investors to check whether their existing investments were held in direct or regular plans, noting that many people were still unaware of the difference between the two.
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Groww responds to criticism
Kamath’s remarks came after Bengaluru based Groww expanded into regular mutual funds through its subscription based Groww Prime platform. The service, initially introduced to select users, has now reportedly been made available to the company’s two crore customers.
Responding to the discussion, Groww said there was “some confusion and some misinformation” surrounding its mutual fund offering.
“Direct mutual funds are, and will remain, the heart of Groww,” the company wrote on X.
Groww said more than one crore investors had built mutual fund investments worth over ₹1.9 lakh crore on its platform.
“For every DIY investor, Groww stays exactly what it has always been: direct, zero commission, and free. Forever,” it said.
The company clarified that MF Prime was an optional service designed for investors seeking research backed guidance on buying, holding, exiting and rebalancing investments.
“If you are a DIY customer on Groww today, nothing changes for you. Not the plans, not the pricing, not the experience,” Groww said, adding that it wanted customers to decide whether they preferred independent investing or professional guidance.