Why Zerodha’s co-founders are not interested in Zerodha IPO? Nithin Kamath on Zerodha IPO

Zerodha IPO: Zerodha is the Largest stockbroker in India, having 7.5+ million Zerodha clients contributing to over 15% of all retail order volumes in India. And it is hard to be such a big private company when the competition is getting hard each day because Every company needs more money to expand their business and gain more clients. 

Zerodha IPO
Nithin Kamath tweet

And in this overvalued market, most of the big unicorn startups are looking towards IPO. Like, NYKAA, ZOMATO, and many more. On these questions of Zerodha’s IPO, Nithin Kamath, co-founder of Zerodha, gave a fulfilling and trust acquiring reply on his Twitter handle.

Also Read: Best Financial YouTube Channels in India 

On Friday, 12 November 2021, Zerodha’s Co-founder Nithin Kamath tweeted a tread. 

Nithin Kamath Tweet On Zerodha IPO

In a tweeter thread, Nithin Kamath described the reason for not applying for Zerodha IPO before SEBI as follows: “Why not IPO @zerodhaonline when you can potentially get ridiculous valuations? Firstly, we think an IPO is the beginning & not the end. As soon as you have lakhs of conservative retail investors on your cap table, the obligations go up exponentially.” 

He added, “We are in a world where companies are getting priced to perfection based on all the future growth potential. For a stock to do well, you have to outperform. As CEO, I dread to think how you can outperform the already really high expectations that growth companies have today.”

He continued, “We have never set revenue or growth targets, always believed that if we can do what is right for the customer & if goddess of luck smiles, the rest will happen. Our core team dreads moving away from that philosophy to be in a chase all the time, which it will be after an IPO.” “The reason the chase is scarier is that broking has hardly any predictability. When someone asks me for a 3-year projection, I usually respond, can you predict what the Nifty Midcap index can do in 3 years as everything from our user to revenue growth almost mirrors that.”

In starting tweets on Zerodha IPO, he wrote why they are not applying for Zerodha IPO when they can get a ridiculous valuation. And, in the end, he defined that the brokering business is unpredictable. And Not only Zerodha IPO, but the Kamath brothers are also not happy with the heavily overvalued IPO’s. 

Because of that, Nikhil Kamath also criticized NYKAA’s overvalued listing. He tweeted, “Nyka lists at 1600 times price to earnings. They sell cosmetics online, Paytm next, best thing for a value stock investor might be to go on a really long holiday right about now.” 

These tweets may warn new retail investors that they shouldn’t apply for every IPO on the basis of YouTube videos, tips, or just by reading on any Instagram Page. 

Every investor should do their research before investing in any IPO, whether it’s Zerodha or any other. 

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