India’s stock market is booming, but not everyone is celebrating. Zerodha, the country’s largest discount brokerage, is facing its steepest revenue decline since inception. With revenues down 15% in FY25 and profits slipping by over ₹1,300 crore, the company’s dominance looks shaky. Even worse, analysts warn of a 40% revenue fall in FY26 if things don’t change. But why is this happening, and why are competitors like Groww thriving in the same environment? Let’s break it down.
Credits: The Economic Times
Zerodha’s Numbers at a Glance
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Revenue: Dropped from ₹10,000 crore in FY24 to ₹8,500 crore in FY25 (–15%).
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Profit: Fell from ₹5,500 crore to ₹4,200 crore.
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Prediction: FY26 could see revenues crash 40% compared to FY24.
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Market Share: Active trader share dropped from 22% in early 2023 to 16% now.
While these numbers might look alarming, they tell the story of how regulatory changes and evolving investor behavior are reshaping India’s brokerage market.
The SEBI Effect: Stricter Rules, Lower Trades
The biggest blow to Zerodha came from new SEBI regulations introduced in October 2024. Here’s what changed:
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Higher STT (Securities Transaction Tax) on Options – Options trading became costlier, making it harder for retail traders to participate.
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Weekly Expiries Reduced – From multiple expiries to just two contracts per week, cutting speculative opportunities.
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BSDA Limit Raised – Many demat accounts now cost nothing or very little, reducing broker earnings.
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Exchange Rebates Removed – Brokers no longer get certain transaction charge rebates.
The result? Fewer trades, lower volumes, and thinner brokerage margins. Since Zerodha’s revenue engine is heavily dependent on active F&O (futures and options) traders, the hit has been particularly severe.
Why Groww is Thriving Instead
While Zerodha bleeds, Groww is flying high:
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Revenue FY25: ₹4,056 crore (up 31%).
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Profit FY25: ₹1,819 crore (3x jump).
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Quarterly Drop: Just 10% in June vs Zerodha’s 40%.
Why the difference? Groww’s model is less trading-centric and more investing-centric.
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It focuses on mutual funds, SIPs, ETFs, and long-term wealth creation—all areas unaffected by SEBI’s crackdown on F&O.
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Groww’s younger customer base prefers passive investing and simple products, giving it stability during regulatory storms.
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With an IPO in the pipeline, Groww is building investor confidence and attracting more first-time investors.
Other Brokers: Same Storm, Different Boats
Zerodha isn’t alone in its struggles.
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Angel One: Revenue fell 30%.
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Upstox: Active investors declining.
This shows that trading-focused brokers are all under pressure, while investing-focused platforms like Groww are stealing the spotlight.
Future Risks for Zerodha
The road ahead looks rough:
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Weekly Options Ban? SEBI is considering removing weekly contracts altogether. If this happens, Zerodha could lose its biggest income driver.
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Possible Strategy Shift: To compensate, Zerodha may introduce brokerage fees on equity delivery trades, which are currently free. That could change its “zero brokerage” identity.
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Investor Behavior Shift: Retail investors are slowly moving away from speculative F&O trades toward long-term investments—bad news for a broker that thrives on high trading activity.
Market Sentiment: A Turning Point
Ironically, all this comes during a bull run in Indian equities. The top four brokers (Zerodha, Groww, Angel One, Upstox) together lost 20 lakh active traders in 2025, despite rising stock markets. This suggests a crucial trend:
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Equity investing is stable and growing.
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F&O speculation is shrinking under regulatory pressure.
Credits: Oneindia
Final Word
Zerodha’s decline highlights how overdependence on derivatives trading can backfire in a changing regulatory environment. Groww, with its diversified wealth products and investor-first approach, is better aligned with the new reality of India’s capital markets.
For Zerodha, the next 12–18 months will be critical. Will it adapt and diversify, or cling to an options-heavy model that regulators are slowly dismantling? One thing is clear: the golden age of speculative trading may be over, and the future belongs to platforms that help Indians invest, not gamble.
