Zerodha has received the final regulatory nod to set up an asset management company (AMC), the discount broker's founder Nithin Kamath announced on August 11, adding that industry veteran Vishal Jain will head its operations as the chief executive officer (CEO).
"We just received the final approval for the Zerodha AMC that we are building in partnership with Smallcase," Kamath posted on X, formerly known as Twitter. Smallcase, a wealth management firm, had in April announced a joint venture with Zerodho to launch the AMC.
"I'm also excited that Vishal Jain, who's been part of the entire passive investing journey in India from day one, has joined us as a CEO to build the AMC," Kamath added.
Zerodha had, in September 2022, received in-principal approval from the Securities and Exchange Board of India (SEBI) to set up the AMC. This came nearly 19 months after it had applied for a mutual fund licence in February 2021.
Kamath, in a statement issued on X on the issuance of the final regulatory approval, said the company's motivation to start a mutual fund was twofold. "The first was that the biggest challenge and opportunity for Indian markets is the shallow participation. Even after all the growth over the last three years, we only have maybe 6-8 crore unique mutual fund and equity investors put together," he said.
"The second was that if we had to bring in the next 10 million investors, they needed simple products they could understand, and mutual funds were a perfect instrument. We aim to be index-only and create simple funds and ETFs that all investors can understand and invest in for all their goals," Kamath added.
Zerodha started its journey in 2010 as a ‘Rs 20 per order broker’ and gained popularity as a no-frills, low-cost player among traders, especially high-volume derivatives traders.
The company's entry into the mutual fund space is likely to keep the sectoral stakeholders on the hook. Kamath, on X, said "keep an eye out" for its first new fund offer.
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