'Not a business where deep pockets means larger moat': Kamath on JioBlackRock stockbroking license

Zerodha CEO Nithin Kamath responded to news of Jio-BlackRock receiving a stockbroking license, calling it a positive development but warning that having deep pockets alone won’t guarantee success in the space.

“This is not a business where having deep pockets means a large moat,” Kamath said in a post on X (formerly Twitter). Kamath said that Zerodha isn’t chasing vanity metrics and remains focused on long-term customer value and sustainable profitability.

Many people asked me about Jio-BlackRock getting a stockbroking license. Firstly, this is great news. The biggest issue for the Indian markets is a lack of breadth in participation. We're largely limited to the top 10 crore Indians.

If anyone can expand the markets beyond the…

— Nithin Kamath (@Nithin0dha) July 2, 2025

Kamath emphasised that Zerodha avoids pushing users to trade excessively, preferring to build tools that encourage prudent investing. “We understand that in the long term, the odds of success are better if customers trade less; most of our product decisions are based on this. We're not interested in acquiring customers using one plan and changing the pricing later,” he wrote.

“We are in it for the long haul and are always working to ensure we have the best product offerings that help our customers grow with us. I don't know if you can say the same about many other financial services businesses in the industry, who are constantly looking to grow at any cost,“ he said.

While acknowledging that Jio’s scale could help expand retail market participation beyond the top 10 crore Indians, Kamath maintained that his real competition lies in founder-led startups, not legacy players or corporate giants.

"This is not a business where having deep pockets means you have a large moat. But yeah, I might be wrong,😬" he added.

Netizens reaction

Kamath’s post, which got over 400,000 views, sparked a wave of responses from users, many of whom praised Zerodha's disciplined growth model and organic journey.

“Inspiring Nithin… Just resonate to everything you said. Wrote. Am a silent old old customer, witnessed every part of the growth,” the user wrote, adding that the post carried “many messages for everyone to imbibe.”

Another user acknowledged that while Jio’s entry could expand the overall market, capturing share from nimble incumbents like Zerodha wouldn’t be easy: “I too think that Jio would increase the pie by using in-house data but it would not be easy to grab the market share from established and nimble-footed players.”

“It’s not a business where deep pocket means more market share. There is too much hype for Jio. At best they can help in broadening the market… but I really doubt if they can scale like Zerodha. Especially from active investors’ perspective,” a third expressed.

"I feel they will do Jio Model here If someone can afford to give demat, funds and research tools at zero cost because they make money elsewhere then even a small shift in customer behaviour can hit the revenue of those who rely only on brokerage and AMC fees. It’s not about better products, it’s about not needing to charge for them. Also they have money to build product experience like Robinhood. Zerodha UX needs to catch up not been great so far. Also KYC they can do easily one of the reason why Zerodha exploded was because of Aadhar based KYC post pandemic," a fourth noted.