Zerodha's Nithin Kamath On Jio-Blackrock: 'Not A Business Where Deep Pockets Mean A Large Moat'
Nithin Kamath sees primary competition coming in from first-generation founders who he described as "running, breathing, and always thinking about broking.
Zerodha Chief Executive Officer and Co-Founder Nithin Kamath said on Wednesday that he does not see a competitive threat from the mutual funds and investment company Jio-Blackrock receiving a stock-broking license.
Jio-Blackrock was formed as a 50:50 joint venture between telecommunication company Jio an arm of Reliance Industries Ltd., and Blackrock, the world's largest asset manager, based in the US.
The company paired Jio's digital reach and interconnected software service networks with Blackrock's 'Alladin Platform' to provide tech-driven analytics to customers.
Kamath, in a post on social media platform X, said he sees primary competition coming in from first-generation founders who he described as "running, breathing, and always thinking about broking".
"This is not a business where having deep pockets means you have a large moat," the co-founder of the discount brokerage firm said.
Kamath said that Jio-Blackrock may expand the breadth in participation for investments saying that it is largely limited to 10 crore Indians.
"If anyone can expand the markets beyond the top 10 crore Indians, it's probably Jio with all its distribution might," he said.
The joint venture reportedly aims to provide its services to people across various income groups to reach those consumers who don't usually have the capital to invest by offering low-risk investment plans with a minimum investment of Rs 500.
Kamath said that Zerodha was not chasing "vanity metrics" and isn't focused on using plans to draw customers in and changing the pricing structure once they have them.
He enumerated the firm's principal philosophy as being against pushing customers to invest and making sure they don't have unnecessary notifications or dark patterns.
"We understand that in the long term, the odds of success are better if customers trade less; most of our product decisions are based on this," he said.
He said the company was "in it for the long haul" and focused on providing product offerings that help their customers grow.
"I don't know if you can say the same about many other financial services businesses in the industry, who are constantly looking to grow at any cost," Kamath said.
