Goal Is To Diversify The Risk: Zerodha's Nithin Kamath On Diversification Plans — Profit Exclusive

Nithin Kamath, the co-founder and chief executive officer of Zerodha Broking Ltd., shared his views on the company's diversification plans in an exclusive interaction with NDTV Profit. The discount brokerage is looking at growing through diversification, he said.

According to Kamath, the broking industry—the business on which Zerodha presently focusses on—has peaked in terms of revenue for the next one to three years. "I don't think those volumes are going to come back," he said.

Kamath then mentioned about the firm's investments in asset management companies, insurance sector, and non banking financial companies. "The goal is to diversify the risk currently the business has," he added.

"Someday, I won't be asked questions on broking," Kamath quipped.

The Zerodha CEO, during the conversation, also criticised the way in which insurance companies in India are "selling investment plans as insurance plans". The need of the hour was to sell insurance plans as insurance plans, and not as investment plans, he added.

Kamath is also of the view that India needs more AMCs who manage passive investment products.

The Zerodha CEO said that he has ambitions to make Zerodha into a bank. "Hopefully we can be a bank one day, currently don't see how."

He spoke about the headwinds bank regulations introduced in Zerodha's growth plans, and said the firm had not applied for a bank license due to regulation risks.

Kamath stated that he ideally wants Zerodha to be a payments bank and doesn't want to focus on lending money.

"But RBI stopped giving payment bank licenses many years back," he said, adding that he hopes something opens up in the future.

Lending is a high risk business which Zerodha did not want to make inroads in, Kamath noted.

"Anything where the value of asset depreciates, be it your mobile phone, your car, is something that I believe is high risk and as a bank you can't do that," he said.