Unlike UPI, The Cap Is Real: Nithin Kamath On 'Hard Ceiling' Faced By Indian Brokerages

Nithin Kamath, the co-founder of Zerodha, took to social media platform X to shed light on the "hard ceiling" on open interest that Indian brokerages are beholden to according to norms and regulations.

Open interest is described as the total number of active contracts not closed, exercised or expired with regards to Futures and Options trading,

The Securities And Exchange Board of India has set a 15% cap at the broker level with regards to OIs.

"No single broker can hold more than 15% of the total market OI. This restriction exists to mitigate the risk of concentration from any single broker becoming too large," Kamath said.

Notably, a significant section of Indian traders place bets in F&O, despite the derivatives trade being projected as risky by the stock market. Around 91% of individual traders incurred losses in F&O trading in fiscal 2025, as per a SEBI report.

Kamath compared the total OI cap to the 33% cap on the market share of third party Unified Payments Interface platforms by National Payments Corporation of India. However, this cap has not been implemented yet by the NPCI.

Notably, PhonePe leads by transaction volume with around 45-48% share, as per December 2025 NPCI data , This is followed by Google Pay at 34-35% and Paytm at 6-7%, with the two leads combined making up over 80% of the market.

"That measure was never implemented because it would've meant UPI apps stopping transactions, but in our case, the limit is applicable," Kamath said.

He noted that this meant that in order for brokerages like Zerodha to grow, their peers must grow as well. Although we have been at nearly 15% of OI for the last five years, fortunately, the overall market has grown, and we've benefited," Kamath said.