Zerodha's Nithin Kamath explains why the company doesn't advertise

Zerodha demonstrated robust performance relative to other discount brokers, witnessing a 1.5 per cent month-on-month increase in its clientele, reaching 7.4 million

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Zerodha co-founder Nithin Kamath on Tuesday explained why his company does not advertise. As a firm, he said, it is a “good place to be” in when Zerodha does not have to look at consumers in terms of acquisition costs and lifetime value.

“I often get asked, both internally and externally, why we don’t advertise. It is a good place to be when you don’t have to look at customers in terms of acquisition costs (CAC) and lifetime value (LTV). This way, we don’t have to push customers to take a trade, we can stay spam-free, not have to sell life insurance as an investment, and more,” Kamath wrote on social media platform X.

Zerodha demonstrated robust performance relative to other discount brokers, witnessing a 1.5 per cent month-on-month (M-o-M) increase in its clientele, reaching 7.4 million from 7.29 million.

Consistently ranking among the top five discount brokers in India, Zerodha has surpassed traditional brokers in terms of active clients on the National Stock Exchange (NSE).

Sign of good times for the markets

Kamath further shared his observation from watching cricket matches, where advertisements endorsing brokerage firms inundated the screen. “I watched a cricket match after a long time, and damn! Every fourth ad is that of a brokerage firm. Sign of good times for the markets,” he said.

He said that by avoiding advertising, Zerodha can remain spam-free and does not have to sell life insurance as an investment, among other things.

Founded by Nithin and Nikhil Kamath, Zerodha is credited with revolutionising discount broking in India. In a podcast last year, Kamath shed light on the company’s trajectory of growth.

“In 2020, the assets under management (AUM) of our customers was maybe Rs 15,000 crore. I don’t think any of our peers, like brokers, looked at us very seriously. They were like, ‘okay, you have made some profits but what eventually matters is the AUM of the business, how much customers trust you with their assets’. It is Rs 3.5 trillion now,” Kamath said.

“I keep telling in the office that there is no status quo in today’s world. Everyone’s gonna get disrupted; we just have to stay sharp. There is no other way to build a business," he said.