Sep 25, 2024 03:12 PM IST
Nithin Kamath emphasizes long-term sustainability over IPOs, citing unpredictable revenue. He believes entering public market would shift focus.
Zerodha founder Nithin Kamath said that his company has stayed away from going public despite soaring valuations which an IPO could bring. Reflecting on the challenges of revenue predictability, he said, “An IPO is not the end, but rather a new beginning. When retail investors enter the cap table, the company should be able to predict revenue to some extent. In the last 14 years, I have not once been correct in predicting revenue growth and dips.”
Read more: Nithin Kamath says Zerodha earned 4,700 crore in FY24, ₹1 lakh crore profit of traders
Zerodha is prioritizing long-term sustainability over chasing inflated valuations, he said, asserting that the company’s business may appear stable based on its financials but it could change rapidly due to shifts in regulation or market conditions.
Read more: Zerodha is expecting a major revenue dip soon, Nithin Kamath shares
He said, “Our business, while it looks good based on financials, can change in a heartbeat due to a change in regulation or markets taking a turn for the worse. We need to do more regarding revenue predictability, and it is impossible to do it just as a brokerage business.”
Read more: Zerodha’s Nithin Kamath is loving ‘ghar-wapsi’ of Indian firms: ‘How the tables turn’
He also said that Zerodha’s focus is more long term because “why take on the burden of expectation from investors when there is nothing strategic or material to gain for the business? Once listed, most companies are forced to shift their focus to growing quarter after quarter at all costs.”
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