Zerodha CEO Nithin Kamath on Friday pointed out a significant drop in trading volumes and the number of active traders in the Indian broking industry, weighing in on the Indian stock market’s sharp decline in the recent months.  

In the wake of the bloodbath at the stock markets on Friday, Kamath took to X (formerly Twitter) to point out that market corrections often lead to sharper declines than the initial rally. “I've no idea where the markets go from here, but I can tell you about the broking industry. We are seeing a massive drop in both the number of traders and volumes,” he stated.

Citing National Stock Exchange (NSE) data, Kamath noted that trading activity across brokers has dropped by 30%, marking the first decline for Zerodha since its inception 15 years ago. He attributed this slowdown to market corrections and new regulatory measures, including the true-to-market circular.

On Friday, the BSE Sensex tumbled 1,414 points (1.9%) to close at 73,198, while the Nifty 50 dropped 420 points (1.86%) to settle at 22,124. IT, tech, auto, and telecom stocks were among the worst hit.

The rout has been attributed to a mix of domestic and global pressures such as jitters over GDP data amid a potential slowdown in the Indian economy, resurfacing trade war fears amid US President Donald Trump expected actions, tech stocks taking a beating, a strong US Dollar prompting capital outflows from India, as well as relentless sell-off by Foreign Institutional Investors (FIIs).

Kamath also raised concerns over the Securities Transaction Tax (STT), which the government expects to generate Rs 80,000 crore in FY 2025-26. However, he predicted that with the current slump in trading volumes, STT collections might fall at least 50% short of estimates, barely reaching Rs 40,000 crore.