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Zerodha’s co-founders Nithin and Nikhil Kamath donate ₹100 crore in FY22

<ul><li><keyword id="44903" type="General" weightage="20" keywordseo="shiv-nadar" source="Orion">Shiv Nadar</keyword> made donations worth ₹1,161 crore during FY22, which comes up to ₹3 crore per day.</li><li>Wipro’s <keyword id="6419840" type="General" weightage="20" keywordseo="azim-premji" source="Orion">Azim Premji</keyword> slips to the second spot with an annual donation of ₹484 crore as his contribution towards philanthropy has fallen by 95% year-on-year.</li><li>Overall, contributions towards philanthropy have fallen in FY22 because of the pandemic impact.</li><li>The top 10 list cumulatively donated ₹3,378 crore in FY22, as against a combined donation of ₹12,785 crore last year.</li></ul>Shiv Nadar, the founder and chairman of HCL Technologies, is India’s most generous, with donations of ₹3 crore per day, even as contributions towards philanthropy continue to moderate after the pandemic. With an annual contribution of ₹1,161 crore in fiscal 2022, Shiv Nadar has displaced Wipro’s Azim Premji as the most generous Indian, according to the EdelGive <keyword id="3606268" type="General" weightage="20" keywordseo="hurun-india-philanthropy-list" source="Orion">Hurun India Philanthropy List</keyword> 2022. The top 10 list cumulatively donated ₹3,378 crore in FY22, as against a combined donation of ₹12,785 crore last year. The good news is that the list has seen 19 new additions, with total donations by these new entrants adding up to ₹832 crore. Also, six women have featured on the list this year. The youngest philanthropist on the list is 36-year-old Nikhil Kamath of Zerodha. Clearly, the young entrepreneurs are beginning their philanthropic journey early on unlike many others from corporate India. Nadar’s philanthropic efforts have mainly focussed on education. Overall, contributions towards philanthropy have fallen in FY22 because of the pandemic impact. Nadar’s donation too is down 8% in the fiscal year 2021-22, as per the list. Wipro’s Azim Premji slipped to the second spot with an annual donation of ₹484 crore as his contribution towards philanthropy has fallen by 95% year-on-year due to the exceptional share buy-back in 2021, says the report. Billionaire <keyword id="3820" type="General" weightage="20" keywordseo="mukesh-ambani" source="Orion">Mukesh Ambani</keyword>, the chairman of Reliance Industries, is third on the list with contributions totalling ₹411 crore. Ambani’s contribution fell 29% compared to last year. Kumar Mangalam Birla was fourth on the list with a contribution of ₹242 crore. Couples Susmita &amp; Subroto Bagchi and Radha &amp; NS Parthasarathy from Mindtree’s management debuted on the list with a combined donation of ₹426 crore to the Indian Institute of Science (IISc) and also entered the top 10 and were ranked fifth. Both Subroto and Parthasarathy are co-founders of Mindtree. With a donation of ₹190 crore, <keyword id="111343" type="General" weightage="20" keywordseo="gautam-adani" source="Orion">Gautam Adani</keyword> &amp; family ranks seventh on the EdelGive Hurun India Philanthropy List 2022. Next in line is Anil Agarwal &amp; family of Vedanta whose contribution increased by 27% from last year to ₹165 crore. Nandan Nilekani and his wife Rohini Nilekani are ranked ninth and eleventh, respectively, in the list and are active philanthropists. Larsen &amp; Toubro’s group executive chairman AM Naik is ranked tenth with a donation of ₹142 crore in FY22. While many billionaires of the past have turned generous later in life, some new-age tech entrepreneurs are giving away much earlier. <keyword id="1430802" type="General" weightage="20" keywordseo="nithin-kamath" source="Orion">Nithin Kamath</keyword> and Nikhil Kamath of Zerodha increased their donation by a whopping 300% to ₹100 crore during the year. At 36 years, Nikhil Kamath is the youngest philanthropist on the Hurun list. Another surprise entrant this year has been Rakesh Gangwal, the co-promoter of InterGlobe Aviation (company that owns Indigo Airlines). Gangwal debuted this year with a personal contribution of ₹100 crore to the School of Medical Sciences and Technology at IIT, Kanpur. “EdelGive Hurun India Philanthropy List aims at chronicling the Indian philanthropy landscape and so far the transformation is encouraging. For instance, over the last 5 years, (the) number of donors who have given more than ₹100 crore have grown from 2 to 15, and over ₹50 crore have grown from 5 to 20. Considering the wealth creation potential of India and assuming that the billionaires keep up with philanthropy, I expect these numbers to at least double over the next 5 years,” said Anas Rahman Junaid, MD and chief researcher at Hurun India. <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Top 10 philanthropists </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Donation (in ₹ crore) </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Primary Cause </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Company </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Shiv Nadar &amp; family </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">1,161 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Education </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">HCL Technologies </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Azim Premji &amp; family </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">484 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Education </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Wipro </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Mukesh Ambani &amp; family </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">411 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Education </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Reliance Industries </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Kumar Mangalam Birla &amp; family </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">242 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Healthcare </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Aditya Birla </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Susmita and Subroto Bagchi </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">213 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Healthcare </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Mindtree </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Radha and NS Parthasarathy </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">213 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Healthcare </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Mindtree </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Gautam Adani &amp; family </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">190 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Disaster Relief </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Adani </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Anil Agarwal &amp; family </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">165 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Disaster Relief </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Vedanta </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Nandan Nilekani </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">159 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Societal Thinking </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Infosys </td></tr><tr><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">AM Naik </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">142 </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Healthcare </td><td style="border-left:solid #000000 0.75pt;border-right:solid #000000 0.75pt;border-bottom:solid #000000 0.75pt;border-top:solid #000000 0.75pt;vertical-align:bottom;padding:2pt 2pt 2pt 2pt;overflow:hidden;overflow-wrap:break-word;">Larsen &amp; Toubro </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/adani-transmission-bags-project-from-best-to-install-over-1-million-smart-meters-in-mumbai/articleshow/94982223.cms">Adani Transmission bags project from BEST to install over 1 million smart meters in Mumbai</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/tracxn-technologies-lists-at-3-7-premium/articleshow/94978323.cms">Tracxn Technologies lists at 3.7% premium</a>

Shiv Nadar tops philanthropy list, even as India’s most generous cut back after the pandemic

Zerodha founders, Rakesh Jhunjhunwala, Akshay Kumar and more donate up to ₹50 crore in FY21

Brokerage firm <keyword id="759851" type="General" weightage="20" keywordseo="Zerodha" source="Orion">Zerodha</keyword> has received in-principle approval from the <keyword id="35210" type="General" weightage="20" keywordseo="sebi" source="Orion">SEBI</keyword> to launch its asset management company. <keyword id="11339820" type="General" weightage="20" keywordseo="zerodha-founder" source="Orion">Zerodha Founder</keyword> and CEO, <keyword id="1430802" type="General" weightage="20" keywordseo="Nithin-Kamath" source="Orion">Nithin Kamath</keyword> said in a tweet on Wednesday: "So, we just got our in-principle approval for our AMC (MF) license. I guess now comes the hard part. The company had applied for an AMC (<keyword id="6354820" type="General" weightage="20" keywordseo="Mutual-fund" source="Orion">Mutual fund</keyword>) license in February last year. "To grow the capital market participation from the current 1.5 crores and address those who currently don't invest (Millenials), we think mutual fund as a product needs to be reimagined. So yeah, we have just applied for an AMC (Mutual fund) license," he had said in a tweet last year. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/uber-has-ola-zomato-has-swiggy-but-whos-urban-company-competing-with/articleshow/85835674.cms">Uber has Ola, Zomato has Swiggy but who’s Urban Company competing with?</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/skit-which-helps-barbeque-nation-and-axis-bank-automate-call-centres-has-raised-23-million-in-funding/articleshow/85834063.cms">Skit, which helps Barbeque Nation and Axis Bank automate call centres, has raised $23 million in funding</a>

Zerodha gets approval to enter mutual fund business

<ul><li><keyword id="1430802" type="COMPANY" weightage="20" keywordseo="Nithin-Kamath">Nithin Kamath</keyword> of <keyword id="759851" type="COMPANY" weightage="20" keywordseo="Zerodha">Zerodha</keyword> believes that the answer to many of the country’s problems lies in moving away from the larger cities.</li><li>Zerodha is already in the process of transitioning as many employees as possible to permanent <keyword id="123591" type="PERSON" weightage="20" keywordseo="Work-from-home">work from home</keyword>.</li><li>The COVID-19 pandemic made ‘work from home’ the new normal as thousands of employees moved back to their hometowns fleeing the bigger cities, which first came under the COVID-19 crisis.</li></ul>Nithin Kamath, founder and chief executive officer of India’s largest stockbroking platform Zerodha, believes that the answer to many of the country’s problems lies in moving away from the larger cities. Kamath wrote on social media platform Twitter, “Large cities are choking and will continue to break down every time we're tested, COVID today, could be water shortages, pollution, floods, etc. Moving to smaller towns &amp; villages will also create livelihoods there &amp; reduce carbon footprint.” <div type="twitter" handle="Nithin0dha" handlename="Nithin Kamath" image="http://pbs.twimg.com/profile_images/1383253892058673154/eBvRFTVL_normal.jpg" favoritecount="884" retweetcount="156" status="While we all work together to figure out what we can do to help in the current situation, I think the only long-ter… https://t.co/72H4SimsMi" createdat="1619256190000" id="1385887027078471683"></div> Zerodha, Kamath wrote, is already in the process of transitioning as many employees, as possible, to permanent work from home (<keyword id="1384155" type="COMPANY" weightage="20" keywordseo="WFH">WFH</keyword>). “We are also now hiring for permanent WFH positions for our Customer support team &amp; soon for other teams as well. I'm hoping that other businesses who can, will also move whatever jobs possible to permanent WFH and nudge their teams to make this transition,” he added. Kamath isn’t the only one with the belief that it’s possible to turn to India’s smaller cities. Another billionaire, Zoho’s founder Sridhar Vembu, has been an advocate for the same for a long time. Vembu has long moved to Mathalamparai, a small village in Tamil Nadu, and runs Zoho from there. The COVID-19 pandemic made ‘work from home’ the new normal as thousands of employees moved back to their hometowns fleeing the bigger cities, which first came under the COVID-19 crisis. After seeing the successful implementation of WFH, companies like food delivery app Zomato, accommodation player <keyword id="2808667" type="COMPANY" weightage="20" keywordseo="OYO">OYO</keyword>, have already said that they are moving towards a working culture which includes permanent work from home. SEE ALSO: <a href="https://www.businessinsider.in/business/corporates/news/indian-corporates-vcs-and-startups-are-now-looking-to-charter-flights-and-import-oxygen-cylinders-and-concentrators-into-the-country/articleshow/82230785.cms">Indian corporates, VCs and startups are now looking to charter flights and import oxygen cylinders and concentrators into the country</a> <a href="https://www.businessinsider.in/business/startups/news/covid-19-pandemic-has-thrown-the-spotlight-on-a-five-year-old-startup-with-emergency-ambulance-service/articleshow/82229745.cms">COVID-19 pandemic has thrown the spotlight on a five-year old startup with emergency ambulance service⁠</a> <a href="https://www.businessinsider.in/india/news/the-covid-19-crisis-would-be-much-worse-without-these-good-samaritans-of-india-providing-home-cooked-food-financial-assistance-and-medicines/slidelist/82230244.cms">The COVID-19 crisis would be much worse without these good samaritans of India providing home-cooked food, financial assistance and medicines</a>

An Indian billionaire says it’s time to pack up and move from India’s large cities and permanently work from home

<ul><li>Indian regulations are far more stringent, well designed, and keep investors’ interest as a priority compared to the US’s capital market regulations.</li><li>On Indian exchanges, you can short stocks for intraday without borrowing from SLB platform. But such positions can’t be held overnight</li><li>Unlike in India, where SLB is relatively new and not active, it is a huge market in the US. Many large short-only hedge funds identify and short companies that aren’t doing well without using F&amp;O, simply shorting the stocks directly.</li></ul>I guess you have read the headlines from the US on how retail traders are causing a “short squeeze” in stocks like <keyword id="363661" type="COMPANY" weightage="20" keywordseo="GameStop">GameStop</keyword>, AMC entertainment, etc. If you haven’t, check this article by <a href="https://finshots.in/archive/gamestop-reddit-retail-investors/">Finshots</a> that explains this well. We have been getting a lot of questions around shorting, and if a short squeeze of this scale can happen in stocks listed on Indian exchanges. It cannot, and below, I explain why. Quick intro to Stock lending &amp; borrowing (SLB) Many people who invest in the markets think that the only way to profit is buying stocks that have the potential to grow with an expectation that if the companies do well, the prices will also go up. This buying of stocks is also called going “long stocks”. While most of us invest or go long stocks, there is a small community of active traders who do the opposite. They identify stocks that are not doing well and bet that the stock prices will go down. The trade is to first sell a stock at the current price (yes, sell a stock without owning it) and then buy it back at a lower price, when it falls, and pocket the difference. You sell a stock that you don’t own by borrowing the stock from someone and then selling it in the market. When the price goes down, you buy it back and then return the stock to the lender and profit. Of course, you can lose money if the stock price goes up instead of down as you would have to buy it back at a higher price. Someone will lend you the stock because the borrower will pay a fee for that and in the process, the lender earns an additional income from their stock holding. Of course, a lender will lend the stocks only if their intention is to hold it for the long term and not sell it within the period for which the stock is lent. This mechanism of lending and borrowing stocks is called Stock Lending and Borrowing or SLB. It was introduced in India in 2008 and activity on the SLB platform only started picking up in 2018 when the regulator permitted rollover of stocks lent upto 12 months (minimum 1+11 months). Shorting on Indian exchanges On Indian exchanges, you can short stocks for intraday without borrowing from SLB platform. But such positions can’t be held overnight as you would be required to deliver the stocks for short positions held into the next trading day. While there are many short trades in stocks taken on an intraday basis, almost all overnight short positions are done using futures and options and not SLB, where traders bet on indices or stocks going down. Here are a few reasons: F&amp;O was introduced in 2001, so it had almost a 12-year head start to SLB, which started seeing the first bit of activity in 2013. Leverage (the ability to trade for more than the capital in hand) is inherently available with F&amp;O as a product. Also, with options, you have the flexibility to set up various trading strategies, and not just naked shorting like with SLB. Until recently, all F&amp;O contracts were cash-settled, which meant that they were simpler to trade than SLB where securities have to move between various accounts. In the exchange business, liquidity chases liquidity. F&amp;O contracts have a lot more liquidity than SLB, so by default, traders prefer to trade where the liquidity is higher as the impact costs tend to be much lower. But that said, there are a few benefits of trading on the SLB platform as well. In F&amp;O you can trade only in multiples of minimum lot size, but in SLB you could borrow and sell as low as a single share of a company. There are around 140 stocks that trade on F&amp;O, but the SLB platform has almost 350 stocks. So if you had to short stocks which are not on F&amp;O, the only option is SLB. F&amp;O contracts have a maximum validity of 3 months. You would have to bear a rollover cost (exit existing and enter the next 3-month contract). In stock F&amp;O contracts, the 3rd-month contract usually never has any trading volume, so you would need to roll over a contract almost every 2 months, which would be very expensive for long term short positions. In SLB, if you find a borrower who is willing to lend, you can borrow and sell stocks and hold a short position for upto 12 months without worrying about rollover costs. Lenders can earn an additional income on their long term portfolio and is an added incentive to participate. Because of these reasons, one might assume that there should be enough interest in the SLB platform to see activity. But there have been a few deterrents. Firstly, the lender’s income is qualified as “income from other sources”, so people lending will have to file using ITR3 and may need audits. Whenever there is a corporate action like rights and bonus issues, there is a forced closeout of the position. Finally, the product is complex in terms of back-end operations compared to F&amp;O, and brokerage firms still don’t have systems to scale this. At <keyword id="759851" type="COMPANY" weightage="20" keywordseo="Zerodha">Zerodha</keyword>, we are working on offering the SLB platform to all our customers in the next few months. Shorting on US stock exchanges Unlike in India, where SLB is relatively new and not active, it is a huge market in the US. Many large short-only hedge funds identify and short companies that aren’t doing well without using F&amp;O, simply shorting the stocks directly. I had written this post a couple of years back, comparing Indian brokerage industry to the US. Here is an excerpt from that post that talks about differences in how security lending works in the US compared to India. How there is an incentive for brokers to lend securities, which has helped grow that market. Securities Lending The structure of our depository system, like our payments system, is a newer and advanced system as compared to the US. This is mainly because India didn’t have a legacy when we went online in the 1990s. We have depositories like NSDL and CDSL where we hold demat accounts that remain unaffected even if a brokerage firm goes into trouble. In the US all securities are essentially held in book or street name with the respective brokers, what they call a “books and records system”. This means the securities are all held by brokers. This also allows the brokerage firm in the US to lend these securities to people looking to short stocks or borrow for various trading strategies and earn an additional source of income (Unlike India, borrowing stocks to short is extremely popular in the US). The earning potential for these stocks held by the broker is typically based on the number of people wanting to short the stock. For example, early this year, when Marijuana stocks were moving wildly, there were periods of time where one could earn as much as 100% or more annualized returns just by lending these stocks. Regulations in the US mandate the brokerages to share some of the lending fees with the person who owns the stock, but the entire thing is quite opaque to the customer. Most never get to know how much was earned. In India, brokers can’t lend securities as they sit in the clients’ demat accounts with the depositories. Also, with the new set of regulations that came out on the 1st of Oct 2019, even securities bought by a customer that are unpaid for, cannot be pledged. Also, India does not have an SLB platform where clients can participate directly, and know the exact lending fees being earned. Shorting stocks – India vs the US Indian regulations are far more stringent, well designed, and keep investors’ interest as a priority compared to the US’s capital market regulations. This is also because of fewer legacy issues compared to the <keyword id="123399" type="ORGANIZATION" weightage="20" keywordseo="US-markets">US markets</keyword>. While some of the exchanges are quite old, all our capital market regulations are quite new and were created after the 1991 capital market reforms. Another reason for lax regulations in the US is the existence of powerful lobbies. A short squeeze or a stock going up forcing shorts to cover their positions by buying back stock which adds even more momentum on the way up can happen to any stock where shorting is allowed. But what we see in some of the stocks like Gamestop, AMC, are glaring loopholes left open by the US regulators. In some of these stocks, the total quantity of stocks shorted (stocks borrowed and sold + using derivatives) is much more than the free float or the total number of shares held publicly. Allowing such large speculative positions is quite ridiculous and a recipe for disaster. While everyone is celebrating retail traders winning over a large hedge fund in this case, it rarely ever plays out this way. Most commonly, retail ends up losing money when there is excessive speculation. In India, we have something called market-wide position limit (MWPL) where the maximum net position allowed in any stock is 20% of free float, both in F&amp;O and in SLB. The maximum allowed per client is 5% of open interest or 1% of total free float. Such position limits ensure that the chances of anomalies that can cause crazy spikes up or down, like what we are currently seeing in some US stocks, reduces significantly. But that said, a lower maximum position limit also comes with its own issues. There have been allegations in India that groups of traders move stocks to ban period (no new positions possible to be added) by buying deep OTM options at very low costs on certain low free float stocks. With no new positions allowed, any spike in the underlying stock price might exacerbate the move by forcing those stuck in a position to cover their shorts, causing a spike in the stock prices. The 5% OI on individual holdings makes this tougher to execute, and there are regulations to punish people who act in concert. Should shorting a stock be allowed at all? This is a philosophical question, and there are both for and against arguments to be made. I am for it because it enables better price discovery of a stock. There have been many occasions where short-sellers have identified potential frauds and ensured that such stock prices don’t go up. Additionally, those who hold short positions usually come to the rescue when there is a free fall in price, and there is no demand to buy a stock. A short position profit-booking by buying back the stock tends to add some support to the fall, reducing volatility. The flipside with shorting is that promoters of listed businesses have to also keep a much closer watch on the stock price. Apart from large short traders, it is possible to have competitors of a company trying to hurt the business by attempting to force the stock price down.

The founder of India’s largest broking firm argues that Gamestop-like chaos would never happen in India

<ul><li>Without any <keyword id="441877" type="PERSON" weightage="20" keywordseo="direct-marketing">direct marketing</keyword> and advertising costs, the platform has been investing on creating awareness about itself through knowledge sharing platforms like Varsity.</li><li>Currently, <keyword id="759851" type="COMPANY" weightage="20" keywordseo="Zerodha">Zerodha</keyword> facilitates over 5 million orders daily, which accounts for about 10-15% of the daily equity volume in India, according to the platform. </li><li>During the months of the lockdown, the company claims to have seen a 100% month-on-month growth.</li><li><keyword id="968035" type="PERSON" weightage="20" keywordseo="Nikhil-Kamath">Nikhil Kamath</keyword>, Co-Founder and CIO Zerodha and <keyword id="8547049" type="UNKNOWN" weightage="20" keywordseo="True-Beacon">True Beacon</keyword>, tells us their magic growth mantra and vision for the Zerodha of the future.</li></ul> Back in 2010, when Nikhil Kamath along with his brother <keyword id="1430802" type="COMPANY" weightage="20" keywordseo="Nithin-Kamath">Nithin Kamath</keyword> founded Zerodha, an online brokerage platform, the duo spent almost nothing on advertising the platform. Since then, their strategy to target consumers has been simple, they have been growing the brand by focusing more on the product, making the end-user’s experience seamless and democratizing participation. Without any direct marketing and advertising costs, the platform has been investing on creating awareness about itself through knowledge sharing platforms like Varsity. The strategy seems to have worked well. Currently, Zerodha facilitates over 5 million orders daily, which accounts for about 10-15% of the daily equity volume in India, according to the platform. During the months of the lockdown, the company claims to have seen a 100% month-on-month growth. We recently caught up with Nikhil Kamath, so understand how the brand has been expanding its offering and how, with zero marketing and advertising spends, the brand has been succeeded in bringing more and more users to its platform. Excerpts: Q) While the Covid-19 lockdown brought about gloom for most organizations, Zerodha has been witnessing substantial growth. Tell us a bit about how the last few months have been and the factors that you feel have led to this growth. We, along with most online businesses, have been lucky through the corona cycle. Work from home has expedited the trend towards moving to mobile and doing most transactions online, which were prevalent pre-crisis. Zerodha, along with the rest of the broking industry has witnessed considerable growth, as a younger breed of millennial investor, is entering the financial markets. Falling interest rates and flattening real yields have also aided in this surge. Historically in a bull market, equity participation rises. But this time around we are witnessing very mature behavior. During a bear market valuations are low, and the market corrects itself, it is an excellent time to make long-term investments. Usually, that is the behavior of seasoned traders. Still, we are experiencing a surge from first-time investors who are looking for viable alternatives to investment than real estate and other forms of investments that have declining yields. The pandemic has heightened this trend as people have more time on their hands to educate themselves and make informed decisions. Q) With so many new people now entering the fray, what steps are you taking to educate them so that they can make informed decisions and trades? We continuously have been building our education ecosystem around the stock market and the <keyword id="2461546" type="PERSON" weightage="20" keywordseo="FinTech">fintech</keyword> space. We do this through educational tools such as varsity, constant engagement on social media platforms and speaking engagements. <keyword id="3342240" type="PERSON" weightage="20" keywordseo="Karthik-Rangappa">Karthik Rangappa</keyword>, who leads the Varsity programme at Zerodha, has been working towards vernacular languages to make the free educational tool accessible to those not well-versed in English. One of the companies we have invested in through our incubator, Finshots, simplifies financial concepts and macroeconomic concepts for the benefit of new participants in capital markets or even incumbents less familiar with business concepts. Q) You say you have zero ad spends. Walk us through the strategy you employed to grow the brand. Our belief to grow the brand is to make the end-users experience seamless and democratize participation. We do this in a couple of different ways. Continually evolving our product to create the end-user experience seamless is one. The most significant growth factor for us is a product that is continually changing. The other is to raise awareness and enable products in the wealth management and fintech space through our incubator, which has led to making the financial ecosystem more robust with companies such as Finshots to Small Case. The ethos behind us investing in startups is to ensure that more people understand the capital markets ecosystem and have a better user experience. To that end, we have varsity to educate and Rainmatter that builds products in the fintech and wealth management space. Q) In your line of business, trust plays a major role as investors are trusting you with their money. How are you building that trust in the minds of your consumers? Most of our new customers hear about both Zerodha and True Beacon through word of mouth and existing clientele. In marketing, testimonials are the highest trust evoking factor. Transparency has been at the forefront of our ethos from the beginning; we continue in our pursuit of simplifying and reducing the opacity around stock markets. For example, in our asset management company True Beacon, we don't have management fees or lock-in periods or even entry and exit fees, which is an industry practice. Instead, we only charge a performance fee that brings greater accountability, and hopefully will align fund management and client interests going forward. Q) Varsity has seen a good uptake among users. What are your plans for expanding on that offering? Yes, we have had great traction with Varsity since its inception and more so during the lockdown. We had over 8 million page views and over 9 lakh app install since March 23, 2020. The number of user-submitted queries have crossed 8,000. Karthik Rangappa, Head of Varsity at Zerodha’s current focus is to continue adding more quality content and cover a wider variety of topics related to capital markets. The slightly longer-term focus is to create a series of high-quality certificate programs. We are even open to the idea of collaborating with the academia (Domestic or International) for accreditation. Q) When you launched, one of your USP was pricing. But now in the discount broking segment, there are many other players too. How are you offering a differentiated product? Zerodha was originally founded with the idea of being a brokerage firm for traders built by traders, and we disrupted the existing pricing structure by introducing a deeply discounted flat fee-per-trade model. Deeply discounted flat fee -per trade model gave us a significant boost, but to stay ahead of the curve, we realized that technology could disrupt the existing models. Traders were using legacy platforms with poor user experiences. Building our proprietary technology to make a trade as seamless as possible kept us ahead of the curve. We continue to invest in technology to keep finding new ways of building investment and trading applications that make the use case for end-users, be it a seasoned trader or a first-time capital market participant, to simplify investments. Kailash Nadh, our CTO who specializes in building products for mass use has selectively built a resilient innovative team who continue to push the boundaries of what can be achieved. Q) You’ve spoken about how your childhood played a defining role in you having a unique outlook towards traditional marketing models. Tell me a bit more. From playing chess professionally as a teenager to all the other pursuits, I might have followed since. The one thing that has always remained relevant is creating a set of rules and staying disciplined within that. This, along with diversification and delaying gratification, has been essential life lessons that might apply to most spheres of life. Stoicism has been a guiding paradigm in my life and a skill that I had to develop as a professional trader. Trading at a very fundamental level is making decisions that would deal with obstacles in a volatile market, stoicism guides you to perceive and react to obstacles rationally and not make emotional decisions. Q) While you aren't advertising now, is there a scope of you doing some sort of advertising/marketing in the near future? Are you willing to explore something like influencer or content marketing in the future? We are not opposed to marketing. However, it should solve a challenge or have some value other than just brand recognition. Influencer marketing is a viable option, provided it teaches something to capital markets participants in an informative way. Q) What is your vision for Zerodha? It is our continuous endeavor to create a platform that can offer differentiated products. Given the high levels of under-penetration in India, there is a huge scope for growth in the capital markets ecosystem. On another front, we have started an asset management firm called True Beacon that caters to the other end of the spectrum than retail users. We have also launched an FPI that enables global investors and not just institutional players to participate in the Indian equity market - thereby encouraging the foreign inflow of investments in the Indian equity market. The response to the True Beacon domestic and global entity has been positive, and we will continue to roll out new products on that first catering to HNIs in India and abroad.

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