Zerodha CEO Nithin Kamath recently stated on X (formerly Twitter) that the company is witnessing “degrowth in the business for the first time” in 15 years. His statement comes amid a decline in active users across stock broking platforms like Groww, Zerodha, and Angel One, as the Indian stock market navigates a challenging phase.
According to National Stock Exchange (NSE) data, eight of the top 10 broking firms saw a decline in active investors in February. The total number of registered users across platforms fell by 1.37% to 48.97 million from 49.64 million in January. Despite this, Groww maintained its top position with a 26.57% market share, though its user base shrank by 1.68% to 13.01 million. Zerodha, the second-largest brokerage with a 16.25% share, also recorded a 1.55% drop, bringing its active users down to 7.96 million.
Nithin Kamath states trading activity dropped 30%
In his post, Kamath pointed to a broader slowdown in trading activity, stating, “The markets are finally correcting. Given that markets swing between extremes, they can fall more just like they rose to the peak. I’ve no idea where the markets go from here, but I can tell you about the broking industry. We are seeing a massive drop in terms of both the number of traders and volumes.”
He further highlighted a 30% drop in trading activity across brokers and attributed the downturn to market conditions and regulatory changes. Kamath noted that the slowdown underscores the limited depth of Indian markets, where trading remains concentrated among a small segment of 1-2 crore investors.
Broking firms see decline in active users
Angel One, the third-largest brokerage, also reported a 1.53% decline in active users, ending February with 7.65 million clients and a 15.62% market share. Upstox and ICICIdirect, which hold the fourth and fifth spots respectively, saw a drop in active users as well. Upstox, backed by Ratan Tata, recorded a 2.42% month-on-month decline, bringing its user base down to 2.79 million, while ICICIdirect saw a 0.57% dip, with active users falling to 1.94 million.
The recent decline in user engagement signals a shift in market sentiment, as broking firms face a slowdown after years of rapid expansion driven by new retail investors.
