Customer trust and referrals drive Zerodha, not incentives: Nithin Kamath

Zerodha founder and CEO Nithin Kamath reflected on the company’s unconventional growth journey, highlighting how customer referrals and word-of-mouth publicity, rather than advertising, have helped the discount broker acquire customers since its inception.

“When we started Zerodha, we didn’t have the money to advertise, not that it would’ve worked,” Kamath wrote on X (formerly Twitter). “So the only way we could grow was through word of mouth and customer referrals. The only way that was possible was to offer products and services customers would talk about.”

Zerodha introduced its customer referral programme when it launched in 2010. Over the years, incentives under the programme have gone through multiple changes due to evolving SEBI regulations. Kamath pointed to 2018–19 as a phase when referrals dipped significantly after the Securities and Exchange Board of India disallowed cash-based referral incentives.


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“We started our referral program when we launched in 2010, and since then, the incentives have changed numerous times because of regulations. A classic example is the dip in 2018/19, when a regulatory change disallowed us from paying a referral incentive,” Kamath said.

Despite these hurdles, referrals have continued to play a significant role in Zerodha’s customer acquisition. According to Kamath, even after the company stopped offering referral incentives altogether, the contribution of referrals to new account openings has remained steady.

“Today, we don’t offer any incentives, and despite that, referrals have more or less stayed flat,” he noted. He further added that indirect referrals, which are not captured in visible data, represent a large share of new customers, underscoring the depth of trust and loyalty the platform enjoys.

Kamath summed it up by saying that customer love is a real superpower for Zerodha, positioning it as a fintech player that scaled into India’s largest stock brokerage without spending heavily on traditional advertising or customer acquisition.

“Also, this image doesn’t capture the significant chunk of indirect referrals, and customer love is a real superpower for us,” he concluded.

Kamath also recently highlighted how the discount broker is grappling with a demat market share loss even as assets under management (AUM) continue to grow. The company is addressing the issue by creating content, though it remains unsure about its impact so far.

Read More: Zerodha's demat market share shrinking, says founder Nithin Kamath. How is it coping?

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