The stock broking industry has become extremely competitive over the last two years, and its participants have been expanding into a wider range of investment products. To float an asset management company or mutual fund in 2023, stock broking giant Zerodha and Smallcase formed a joint venture called Zerodha Fund House after Groww launched its own mutual fund.
As per three sources who are aware of the conversational details, Zerodha Fund House is currently considering investing outside. “They are in preliminary discussions with several investors to raise up to $100 million for the AMC business,” said one of the sources requesting anonymity.
The Zerodha Group has never before sought outside funding, for those who are unaware. Bootstrapping the stock brokerage firm owned by the Kamath brothers since 2010.
“The talks are exploratory in nature and Zerodha Fund House may take months to finalize the deal,” said another source who also wished not to be named as this person isn’t authorized to speak to the media.
Zerodha Assets Management Private Limited is the organization in charge of overseeing Zerodha Fund House. As per media reports, Smallcase holds the remaining stake in the share capital, with Zerodha Broking owning 70% of it.
The two index funds, Zerodha Nifty Large Midcap 250 Index Fund and Zerodha ELSS Tax Saver Nifty Large MidCap 250 Index Fund, were introduced by Zerodha Fund House and feature a portfolio of 250 Indian companies.
Additionally, the business introduced its Liquid, which has an asset under management (AUM) of Rs 311 crore, and its Gold ETF, which has an AUM of Rs 35 crore.
In addition to its primary stock broking business, Zerodha reportedly entered the AMC market in an effort to integrate various aspects of wealth management.
Four significant players—Zerodha, Groww, AngelOne, and Upstox—are engaged in intense competition in the stock breaking space. In October of last year, Groww overtook Zerodha in terms of users. Notably, during the fiscal year that concluded in March 2023, all four of the players turned a profit.
