Concentration of wealth is a real problem, says Zerodha’s Nithin Kamath

Billionaire stock broker and Zerodha CEO Nithin Kamath sat down with DH’s Lavpreet Kaur to explain everything from the state of the stock market to what motivates him to give more wealth away. Edited excerpts.

Have you seen any changes in retail investor behaviour in these volatile times?

Most developed markets have collapsed, we’ve been holding up, right? Hence there is volatility and I don’t think retail investor behaviour has changed. Historically, if you look at stock markets, retail behaviour is directly proportional to underlying market sentiment. If margins are going up, people invest more, markets are going down, people become inactive. But the ferocity at which markets are going up is reducing, which means that the new user acquisition isn’t as fast as before.

Are recession fears affecting investor decisions?

One thing is it’s not showing up in the Indian economy yet. Until now, there’s a lot of fear on the street, but it doesn’t seem to be in the price of the stocks, and then that’s probably because all the data that’s coming out of India has been quite positive. If you look at the GST number that came out, so now we are at an all-time high in terms of collection, the GDP is doing well. But eventually, you know, the world is married together. So, I have a feeling, eventually it will catch on. You don’t know when it will. But for now, I think we are doing much better than the world.

Did you see people invest more this festive season?

When I was asking some of my friends who run e-commerce businesses, they said the sales (during Diwali) were lower than last year. So even on the stock market, like on the Diwali day, there is this thing called “muhurat trading” which is like a two-hour window where markets are open, it’s a special window. This year, it was very tepid (compared to last year).

Are you seeing investors selling stocks to fund their discretionary spending?

We don’t have granular data of customers. So, it’s very tough for us to figure out if someone selling stocks is selling them for (whatever reason). People are not really selling stocks. So, I think people might be selling gold, real estate and all that.

You were featured on the list of India’s top philanthropists. Why did you give away some of your wealth so early in life?

The concentration of wealth is a real problem, and eventually, wherever there is wealth concentration, I think people have to do more to give back because if you don’t do it, (it will) eventually lead to societal imbalance and it’ll lead to a civil war or whatever. So I think the onus should be on every person where wealth is concentrated, to distribute wealth, because if you don’t, it will come back to haunt you. The problem is everyone’s looking (at the) short term and not really thinking long term. If I want to live in a society where there is no imbalance, where you don’t have to fear walking on the street, then I need to distribute it well today.