Synopsis
Zerodha's CEO Nithin Kamath announced a decline in their business for the first time in 15 years, with trading volumes dropping over 30% due to unfavorable global cues. The situation raises concerns about future government revenue from Securities Transaction Tax.Key Takeaways
- Zerodha experiences first decline in 15 years.
- Trading volumes drop over 30%.
- Concerns about government revenue from STT.
- Market activity largely limited to 1-2 crore traders.
- Sensex dropped nearly 1,430 points.
New Delhi, Feb 28 (NationPress) As the Indian stock market faced a downturn on Friday due to unfavorable global signals, Zerodha's CEO and Co-founder Nithin Kamath announced that the company is experiencing a decline in business for the first time in 15 years.
In a message shared on the X social media platform, Kamath mentioned that the number of active traders and overall trading volumes have seen a significant drop of over 30%.
“Across various brokers, there has been a decline of more than 30% in trading activity. Coupled with the true-to-market circular, we are witnessing a downturn in our business for the first time since our inception 15 years ago,” stated Kamath.
He further noted that the reduction in trading volumes indicates the superficial nature of the Indian markets. “The activity largely involves around 1-2 crore Indians,” wrote Kamath on X.
The stock market experienced a significant drop as US President Donald Trump stirred the global markets with the announcement of new trade tariffs.
Trump confirmed that new tariffs on imports from Mexico and Canada would commence on March 4. Additionally, tariffs on Chinese imports are set to double to 20%.
Kamath expressed concern that the decline in trading could affect government revenue from the Securities Transaction Tax (STT).
He warned that if this trend persists, STT collections for FY 2025-26 could drop below Rs 40,000 crore, which would be at least 50% less than the government's projected Rs 80,000 crore.
“I can't predict the future of the markets, but I can speak about the broking sector. We are witnessing a significant drop in both the number of traders and trading volumes,” Kamath concluded.
During intra-day trading, the Sensex plummeted nearly 1,430 points, or 1.9%, reaching around 73,200.
