Zerodha will soon let you invest in US stocks
What's the story
Zerodha, India's leading stockbroker by revenue, is gearing up to launch a feature for investing in US stocks. The announcement was made by the company's founder and CEO Nithin Kamath during an Ask Me Anything session on YouTube. "We are working on it, and we should have something in the next quarter. It is a product launch," Kamath said.
Regulatory compliance
Using GIFT City framework for stock investments
The Bengaluru-based brokerage firm is working on the product using the GIFT City framework. This route offers regulatory clarity for global financial services and investments under the International Financial Services Centre Authority (IFSCA). Zerodha CTO Kailash Nadh said, "We now have the required regulatory clarity through GIFT City. We are working to make the backend and frontend experience simple."
Financial outlook
Zerodha's financial performance and future outlook
Zerodha's financial performance has taken a hit in recent years, with a 15% drop in revenue and profit for FY25. The company reported revenue of ₹8,500 crore and net profit of ₹4,200 crore. For FY26, Zerodha expects an even steeper revenue fall of roughly 40% from FY24 levels due to recent changes in futures and options (F&O) trading rules.
Past efforts
US stock investments previously considered but halted
Back in 2020, Zerodha had considered offering US stock investments but the plan was scrapped due to COVID-19 disruptions and regulatory hurdles around overseas remittances. The new strategy is likely to leverage the India INX Global Access and NSE-IX Unsponsored Depository Receipts (UDRs) platforms at GIFT City for such investments.
Market competition
Other Indian brokerages offer US market access
Notably, other Indian brokerages such as Angel One, HDFC Securities, INDmoney, and Kuvera already allow users to invest in US markets. However, some platforms like Groww paused onboarding in early 2024 due to complications with remittance rules, and the higher 20% Tax Collected at Source (TCS) on overseas investments above ₹7 lakh.