Zerodha CEO Nithin Kamath has said his online brokerage firm is bracing for a revenue plunge by 2024 end.
The co-founder of the broking company said the new SEBI regulations, which are set to be effective from October 1, will affect its core business operations in the upcoming quarter. Kamath said Zerodha is already witnessing a "revenue and profit plateau", adding that the revenue will plummet 10 per cent beginning October.
Another factor contributing to the loss in earnings is the upcoming restrictions on derivatives, which could reduce the revenue by 30 to 50 per cent.
He added that the increase in Securities Transaction Tax (STT) from October 1 will massively hit futures trading while it might not have much impact on options trading.
Zerodha currently charges Rs 200 as account opening fee from customers. However, it is set to do away with this too, bringing down the revenue further.
Kamath pointed that SEBI has set a new Basic Services Demat Account (BSDA) threshold, which will change the Annual Maintenance Charges (AMC) collected by brokerages. He said broking firms, which now collect full AMC from customers with a demat holding above Rs 4 lakh, can charge only those holding more than Rs 10 lakh from next month.
Zerodha has been sharing a small percentage of its brokerage as a commission to customers who referred new customers. However, it will now be forced to cancel its referral programme as the exchanges have issued guidelines saying payout can be made only to Authorisde Persons registered with them.