Buoyed by a steady rise in new trading accounts and untapped potential in North India, Bangalore-based online broking firm Zerodha is looking at a three-fold growth in revenues to Rs 60 crore in 2013-14 and is in talks with US-based brokerages to upgrade technology and simultaneously raise about $1 million, according to its founder and CEO Nithin Kamath.
He told Deccan Herald, “We are adding about 1,500 trading accounts every month and will end the current year with about 23,000 accounts, up from about 10,000 last year. Given this and our expansion plans over the coming months, we are confident of taking our revenues from an expected Rs 20 crore this fiscal to about Rs 50 to 60 crore next year.”
Besides, the firm is also looking for a strategic investor who would double up as a technology partner. “We are in talks with US-based brokerages. The amount to be raised would be in the range of about $1-1.50 million. We will be finalising the deal soon.”
He said that Zerodha will open a support centre in Ahmedabad this month and also in Surat, Kolkata and New Delhi in this calendar year.
Currently, about 70 per cent of its traders are based in South India. Zerodha operates on a profit margin of about 60 to 70 per cent and has a 70-member team including support centres in Hyderabad, Kochi and Hubli, apart from two offices in Bangalore.
The potential for online trading in India is huge; there are only about 40 lakh active traders, which has the potential to go up, according to Kamath. The number of demat accounts stood at about 2.10 crore as on February 28, 2013, at the two depositories, National Securities Depository Limited (1.26 crore demat accounts) and Central Depository Services (India) Limited (82.87 lakh demat accounts).
Zerodha’s daily business is about Rs 2,500 crore in equities, out of which about 95 per cent is in F&O segment and rest in cash. Besides, the daily turnover in commodities is about Rs 500 crore.
A zero-debt firm, Zerodha’s capital base is Rs 15 crore, all from promoters.