In a recent LinkedIn post, Nithin Kamath, founder of Zerodha, discusses the foundational principles that guided his company’s approach to discount brokerage and mutual fund distribution in India. Kamath reiterates his long-held belief that a true discount brokerage model should not penalize investors for larger trade sizes, a philosophy that has shaped Zerodha’s product and pricing strategies since its inception in 2010.
Kamath highlighted the initial decision to adopt a flat fee per trade, regardless of the transaction size. This approach was rooted in the idea that the execution effort for a trade remains constant, irrespective of the amount involved. He extended this logic to mutual funds, emphasizing Zerodha’s commitment to offering only direct plans from the outset.
“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 core principle, as Nithin Kamath explains, has been instrumental in all of Zerodha’s product and pricing decisions. He asserts that charging a percentage-based fee for larger trades contradicts the very definition of a discount or low-cost brokerage service.
The Success of Direct Mutual Funds
Kamath also elaborated on the success of Zerodha’s Coin platform, which he states is now the largest direct mutual funds platform in India. He proudly noted that Coin manages nearly ₹1.6 lakh crores in direct mutual fund assets under management (AUM). Furthermore, he pointed out that Zerodha’s customers have collectively saved thousands of crores in commissions by opting for direct plans.
According to Nithin Kamath, direct mutual funds are a clear advantage for self-directed investors. He expressed surprise that many direct MF platforms launched around the same time as Coin have either ceased operations or changed their business models. Even some remaining platforms, he observes, are reconsidering their focus on direct plans.
“Coin today is the largest direct mutual funds platform in India, with nearly ₹1.6 lakh crores in direct MF AUM, and all our customers have saved thousands of crores in commissions.”
Zerodha’s Unwavering Commitment
Despite the shifting landscape, Kamath affirmed Zerodha’s continued dedication to offering direct mutual funds free of charge. This commitment underscores the company’s long-standing ethos of prioritizing investor savings.
The Importance of Understanding Plan Types
Kamath also addressed the persistent lack of awareness among many investors regarding the distinction between direct and regular mutual fund plans. He stressed the importance for investors to verify the type of plans they are invested in.
“A lot of investors still don’t know the difference between direct and regular plans. If you are investing in mutual funds, it’s worth checking if your investments are in regular or direct plans.”
He concluded by offering assistance to those currently invested in regular plans who wish to transition to direct plans, reinforcing Zerodha’s role in guiding investors towards more cost-effective investment avenues.
📝 About This Content
This article is based on insights shared by Nithin Kamath on LinkedIn.
📅 Originally posted on July 9, 2026 | View original post on LinkedIn →