Nikhil Kamath – From dropout to youngest billionaire

Zerodha was co-founded by Nikhil Kamath and Nithin Kamath, in 2010. Zerodha took a couple of years to get its first thousand users. And today it has around 4.5 million active monthly users. Just possible by the efforts of its cofounders. In which, Nikhil Kamath has an extraordinary journey, from dropout to youngest billionaire.  The cofounders were listed in India’s 100 richest people of 2020, by Forbes.

Zerodha became India’s largest trading platform offering retail brokerage, currencies and commodities trading, mutual funds, and bonds. It has headquarters in Bangalore. Zerodha – the name is a combination of “zero” and “rodha”. The “rodha” is a Sanskrit word meaning obstruction.

Nikhil Kamath grew up in Banglore. He comes from a sound background, from a middle-class family. Father worked in the state-owned bank and mother was a teacher of Carnatic classical music. Still, Kamath dropped out of school after class 10th, when he was 16 years of age. Something uncommon for someone who comes from a middle class and such a background.

Why did he drop out of school?

Nikhil was not very much inclined to study He was just in class 10th when he started selling second-hand cell phones. And he was making good business out of it, which he evolved with other businesses. At just 17, he started a full-time job, at a call center. In the same period, he started trading equity. Nikhil worked between 5 pm to 1 am, in the UK shift, so that he could trade in the morning. He started managing money for his friends, which was the beginning of asset management for him.

At 18, he started trading stocks better. When even his dad has started trusting him and gave his money to manage. Nikhil also managed to convince his manager at the call center, for managing his money, that worked for him. And so, his manager got more people into it. This is how he came to manage the money of his entire team. After that, Nikhil quit the call center at 20, as he learned to make a bit of money trading. And started hand in hand with his brother Nithin for auto trading.

Nikhil Kamath says – “I absolutely hated school. Nobody told you ‘why’ you should do something, you just ‘had’ to do it; it was inhibiting”, as per sources.

He also said, “I learned a lot; when you move away from the family ecosystem and the judgement of relatives, you get down to the real stuff.“, in a post.

 

Why trading?

Nikhil was influenced by his elder brother as well as by his friends for trading. He considers trading “as a very independent journey: you can’t really copy how another person trades.It’s very individualistic, like what works for one will not work for another. I was a sub-broker with a company and they charged me a brokerage for my clients. They would give me 60 percent and they would keep 40 percent, but it was a very inefficient way of doing things because you pay tax twice and stuff like that. So we decided to start broking with the intention that Nithin will focus on broking, I will focus on trading, which was our primary business, and trading will in a way bootstrap the broking business and grow it. Hence, we don’t even have any investors today”, Nikhil said, in an interview.

Nikhil Kamath claims that “becoming a billionaire doesn’t change him–he is still that guy who works around 85% of the day and lives with the insecurity of, ‘What if it’s taken from me?’ .So he advises to not bother about this, much– as after 5 years, the things you’re worrying about now, won’t matter–so why not do what you have to today and have ‘stupid faith’ that it’ll all work out…somehow?”, as per sources.