Zerodha says AUM is growing despite a trading slowdown, flags ₹9,000 crore MTF exposure
On its 16th anniversary, Zerodha said trading volumes and new client additions have slowed since Indian equities peaked in September 2024, while AUM continues to rise. Founder Nithin Kamath flagged the ₹9,000-crore margin trading facility book as a leverage risk; it contributes about 10% of revenue.
What happened
Zerodha says trading volumes and new client additions have slowed since September 2024, but AUM continues to grow. Founder Nithin Kamath flagged its
Key facts
- ₹9,000 crore MTF book
- ₹6,000 crore borrowed by clients under MTF
- MTF exposure roughly 25% of Zerodha's net worth
- MTF contributes about 10% of revenue
- Zerodha's core team remains under 100 people
- Zerodha marks 16 years
- $8 billion business
Why this matters
Slower retail trading activity may make adjacent wealth, advisory and long-term investing capabilities more strategically attractive, while any partnership or acquisition assessment should scrutinize leverage-linked revenue exposure.
What to watch
- Monthly NSE/BSE cash and F&O turnover trends and active trader counts.
- Zerodha net client additions, demat account growth and investor-versus-trader mix.
- MTF book growth versus AUM growth, collateral quality, concentration and any disclosure of delinquencies or forced liquidations.
- A sustained 10% or greater market correction, volatility spike or sharp fall in high-beta retail-owned stocks.
- SEBI or exchange action on F&O participation, leverage, upfront margins, position limits or MTF disclosure standards.
- Revenue mix shifts away from transaction income toward AUM-linked and investment-product income.
- Tighten MTF eligibility, collateral haircuts and concentration limits rather than prioritize rapid book expansion.
- Increase emphasis on AUM-led products such as direct mutual funds, bonds, ETFs and advisory-adjacent tools to offset weaker trading turnover.
- Manage costs and marketing spend as slower client acquisition reduces the payoff from aggressive onboarding.
- Communicate MTF risk metrics, client concentration and liquidation safeguards more regularly to pre-empt concerns.