Zerodha’s Nithin Kamath Says New Indian Investors Aren’t Speculating
People wearing protective masks look up at the Bombay Stock Exchange building in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Zerodha’s Nithin Kamath Says New Indian Investors Aren’t Speculating

As India's markets posted an unprecedented recovery after the pandemic lows, retail investors piled into equities to ride the record rally. But, according to the head of nation's largest broking firm by clients, these first-time investors aren’t speculating using options.

Most new retail investors are investing in stocks, Nithin Kamath, chief executive officer of Zerodha Broking Ltd., told Bloomberg Television in an interview. And a majority of Indians, he said, are investing in the top 100-200 stocks, one of the positives compared with the U.S.

Kamath attributed the behaviour to the Securities and Exchange Board of India’s rules that make margin funding difficult, making investors pay the whole amount up front while purchasing shares.

Why India Won’t See A GameStop

Kamath doesn’t expect a GameStop-like phenomenon will happen in India.

India doesn’t possess big-enough Reddit or Twitter communities with concentrated activities to move stocks, he said. The only way to short-sell in India, according to him, is through futures and options, which is allowed narrowly within the top 100-150 stocks.

Watch the entire conversation here:

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