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The founder of Stock Broker firm – Zerodha Mr Nithin Kamath, announced on August 11, 2023 (posted on social media platform ‘X’, formerly known as Twitter) that they have received a final regulatory nod from SEBI to set up its Asset Management Company (AMC).
Zerodha has received in-principal approval from the SEBI to establish the AMC in September 2022. This happened about 19 months after it submitted a mutual fund licence application in February 2021. Additionally, in April of this year, the wealth management company Smallcase announced a partnership with Zerodha to introduce the AMC.
Mr Nithin Kamath in a statement issued on the SEBI approval for launch of AMC said, “Our motivation to start a mutual fund was twofold. The first was that the biggest challenge and opportunity for Indian markets is the shallow participation. Even after all the growth over the last 3 years, we only have maybe 6-8 crore unique mutual fund and equity investors put together.
The second was that if we had to bring in the next ten million investors, they needed simple products they could understand, and mutual funds were a perfect instrument. We aim to be index-only and create simple funds and ETFs that all investors can understand and invest in for all their goals.
Zerodha started its journey in 2010 as a ‘Rs 20 per order broker’ and gained popularity as a no-frills, low-cost player among traders, especially high-volume derivatives traders.
Now, the company's entry into the mutual fund space is likely to keep the sectoral stakeholders on the hook. Kamath, on X, said “I’m also excited that Vishal Jain, who's been part of the entire passive investing journey in India from day one, has joined us as a CEO to build the AMC. So yeah, keep an eye out for our first NFO.”
[Read: New Mutual Funds Launched in 2023: Which Ones Should You Invest in?]
Currently, the mutual fund industry in India is witnessing new entrants like Jio Financial Services (JFSL) who recently joined hands with BlackRock, one of the world’s largest asset managers. Samir Arora’s Helios Capital has received SEBI’s approval to launch a mutual fund business.