Zerodha, India’s largest online stock broker, has warned that its revenue and profitability may be hit in the financial year 2023-24, due to the implementation of the new regulations governing stock brokers. The regulations are part of the Securities and Exchange Board of India (SEBI)’s efforts to make the stock market more transparent, efficient, and investor-friendly.
The company said that the competition in the Indian broking industry is likely to intensify over the next few years and the impact of regulatory changes may also have an adverse effect on its business. Zerodha expects its revenue to be affected by increased competition and regulatory changes in the long term.
The new regulations, which are expected to come into effect from April 1, 2023, will require brokers to provide more detailed disclosures and adopt higher standards of transparency. They will also introduce a new fee structure which will reduce the amount of commission that brokers can charge.
The company also noted that its profitability may be further impacted by the introduction of new services such as mutual funds, digital gold, and other products. Overall, Zerodha believes that the regulatory changes will lead to a more efficient and transparent stock market, which will benefit investors in the long run. However, in the short term, the broker has warned that its revenues and profitability may be hit.
