Zerodha AMC gets approval; industry veteran Vishal Jain to be the CEO
Mumbai: Zerodha founder Nithin Kamath announced that the discount broker has obtained the necessary regulatory approval to establish an asset management company (AMC).
In a tweet on Friday, he further revealed that industry veteran Vishal Jain will lead the operations of the AMC as its chief executive officer (CEO).
"We just received the final approval for the Zerodha AMC that we are building in partnership with Smallcase," Kamath posted on X, formerly known as Twitter.
In April, Smallcase, a wealth management firm, and Zerodha had announced a joint venture to launch the AMC.
"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," Kamath added.
Zerodha had initially obtained in-principle approval from the Securities and Exchange Board of India (SEBI) in September 2022 to establish the AMC. This approval came after the company had applied for a mutual fund license in February 2021, a process that took nearly 19 months.
In a statement released on the occasion of receiving the final regulatory approval, Nithin Kamath explained that Zerodha's decision to venture into the mutual fund space was driven by two main factors.
"The first was that the biggest challenge and opportunity for Indian markets is the shallow participation. Even after all the growth over the last three years, we only have maybe 6-8 crore unique mutual fund and equity investors put together," he said.
"The second was that if we had to bring in the next 10 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," Kamath added.
Established in 2010 as a pioneer of the 'Rs 20 per order' brokerage model, Zerodha quickly garnered attention as a cost-effective option for traders, particularly those involved in high-volume derivatives trading.
Zerodha's foray into the mutual fund domain is anticipated to generate interest among various players within the sector. Nithin Kamath hinted at the company's upcoming initiatives by suggesting to stay attentive for the announcement of its inaugural new fund offer.
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