Demolition of traditional broking firms by Zerodha & Upstox


In 2019, Zerodha confirmed itself as India’s largest broker with active clients, outperforming the decade-long pole position of ICICI securities. But again surpassed by another markdown brokerage Upstox, ICICI securities is shifted to third position. Exceptionally after COVID-19 hit, discount brokerages now count for two-third of market share in developing NSE active clients. This is supported by a surge in retail engagement in the stock market.

From the 4% market share in FY14, the share of markdown brokers arose to 28% by FY20, that turned to 36% as of 5 months in FY21, in accordance with Spark Capital.

“We at ICICI securities cater to a much larger need set of our clients rather than only equity. Our company is moving purposefully on its chosen path of high growth with sharp focus on quality customers. We have made progress on a holistic set of parameters which given as indication of our journey on our chosen path, rather than just focusing on a single metric with no color on quality and value”, says the CEO,ICICI Securities.

As of October-end, Zerodha and Upstox, being the top two competitors, own over 26 lakh and 14 lakh active cliets respectively on NSE. ICICI securities have over 12.15 lakh clients.


“NSE launched a free trading platform called NSE Now for all exchange members, which we utilized as a base for a flat-free true model. The model was not unique. Charles Schwab had already done it in the US in 90s, but it was a new concept in India”, said Nithin Kamath, founder & CEO, Zerodha.

He said he often pondered the need to pay a large sum of brokerage in an online space. The current position of Zerodha was made by a new, well-timed service by the National Stock Exchange.

At first, the business was for active traders. Less than 5-10 lakh traders were present at that time. But after realizing its limitations, Zerodha launched zero-brokerage on distribution trades in December 2015. This launching was aimed to approach a bigger capitalist viewers.

“We were getting labelled as a broker for active traders not long-term investors. So, zero-brokerage gave us virality. Then demonetization was a tipping point for us. Post-demonetization, with Aadhar revolution, digital on-boarding of customers gave us a big pull-up”, says Zerodha.

Zerodha initiated another trading platform KITE, which was followed by a mutual fund platform COIN. KITE Connect API financially accessible for trading or investments. Zerodha Varsity is one of the biggest trade market education portals which is charge-less. Zerodha estimated over 1000 crore revenue in FY20. The profit rushed to ₹627 crore in FY21.

In the meantime, Upstox has covered the 2 million customer milestone. In June 2020, Upstox owned 1 million customers and achieved another 1 million within 5 months. Upstox is said to have a perfect blend of brokerage & non-brokerage profits.

“Brokerage revenue is derived from a fee we charge on intraday trades. Non-brokerage is a mix of fees we may collect for various value-added services”, says Upstox.


Pricing structure is no longer the varying element in the broking firm due to this interferences. Therefore, there has been a change from ad-valorem to flat pricing. Subscription model is the next trustful factor. ICICI Securities has it since 2019, while the latest competitors like Groww, Paytm Money and Bajaj Financial Securities have initiated subscription plans.

“Penetration of our Prime and Prepaid subscribers among our NSE active customers has now reached nearly 44%, crossing 5 lakh customers who now contribute more than half of our revenues. We have very recently updated the Prime plans as well as launched a new Prime plan. One of the interesting features of this Prime is ₹299 plan with a smaller instant liquidity limit. This was introduced to attract the newer and younger customers entering the market”, says ICICI Securities.


Demonetization and Covid-19 hit surged the digitization in this firm.

“All cross sections of clients, including HNIs driven by health concerns, have adopted or are adopting digital mode of interacting with us and making investments. Such behavioral shifts typically take many years which have happened in just six months. The regulator too has been proactive and has taken steps to enable the industry to acquire and service customers digitally while simultaneously de-risking the market with regular regulatory interventions”, says ICICI Securities.

Digital savvy, that seeks quality of User Interface and User Experience is the recent trend of investors setting foot in stock market.

“At Upstox, our digital-first approach helps us grow and build a rich user experience and advanced features, which our customers love. We have been growing at a rapid pace mainly due to our products and positive word-of-mouth by our customers”, says Upstox.

Zerodha has an NBFC license due to its regular breakthroughs. It has also requested for insurance broking and AMC license too.

ICICI Securities has inititated a new website interface, which currently beholds bigger traffic.




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