Wed Sep 25 08:14:01 UTC 2024: ## Zerodha Prepares for Revenue Dip, Focuses on Collaborative Decision-Making Amidst Succession Planning Uncertainty

**MUMBAI, INDIA -** Zerodha, India’s leading stockbroker, is anticipating a significant revenue decline in the upcoming fiscal year (FY25), primarily due to upcoming regulations from the Securities and Exchange Board of India (SEBI).

Zerodha co-founder, Nithin Kamath, revealed in a recent blog post that the company expects a 30-50% reduction in revenues. He attributed this projected drop to SEBI’s upcoming “true-to-label” circular, scheduled to come into effect on October 1, 2024, which could cause a 10% revenue decline. Additionally, SEBI’s consultation paper on index derivatives, expected to be finalized as regulation within the next quarter, could further contribute to a 30-50% revenue drop.

Kamath highlighted that index derivatives currently constitute a major portion of Zerodha’s revenue and any regulatory changes will have a considerable impact. He also pointed out that the upcoming increase in securities transaction tax on F&O (futures and options) from October 1st will likely further affect futures trading.

Despite these challenges, Zerodha reported strong financial performance in FY24, achieving revenues of approximately ₹8,200 crore and a net profit of ₹4,500 crore, reflecting an increase from the previous year. However, Kamath has ruled out any immediate plans for an IPO, citing the uncertainty surrounding revenue predictability in the current market conditions.

The company’s CEO also addressed succession planning, a topic that gained prominence following his health scare earlier this year. After suffering a stroke in January, Kamath spent a month away from work, prompting him to reflect on his future at Zerodha.

Though he returned to work, succession planning remains a secondary priority. Kamath emphasized Zerodha’s commitment to a collaborative decision-making structure, where an internal team shares all decision-making and rationale, ensuring continuity beyond any single individual’s involvement. This approach, he stated, positions Zerodha for long-term sustainability even in the face of leadership changes.

Zerodha’s focus on fostering a culture of collective decision-making, coupled with its robust financial performance, demonstrates its ability to navigate upcoming regulatory changes and maintain its position as a leading player in the Indian financial market.

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