Zerodha’s New Reality, Eternal’s Latest Moves, and Simpl’s Lay Offs

For more than a decade, Zerodha stood as the poster child of India’s discount brokerage revolution. By removing brokerage fees on equity delivery and offering ultra-low costs on trades, it became the country’s largest broker, reporting revenues of ₹8,370 crore and profits of ₹4,700 crore in FY24 - margins that would make even global banks envious. But FY25 changed the script. A wave of regulatory changes from SEBI has cut deeply into its core, with brokerage revenue falling by nearly 40% and its old model now under threat.

SEBI’s crackdown on India’s overheated F&O market - where its own data showed nine out of ten traders were losing money - has been the single biggest blow to Zerodha’s old model. Higher margin requirements, curbs on weekly options, the removal of exchange rebates, and tighter KYC norms have collectively slowed trading volumes, with NSE derivatives activity down 26% in FY25. For a broker that built its fortunes on ultra-low brokerage and high speculative turnover, the hit was immediate: Zerodha’s brokerage revenues fell nearly 40% year-on-year, and the once-vaunted “free delivery” model looks far less viable.

But Zerodha has been quick to adapt. It has expanded aggressively into margin trading, building a loan book of ₹5,000 crore in less than a year, and shifting its focus toward wealth management, advisory services, and mutual fund distribution. The pivot is deliberate: trading-based revenues are volatile, lending and wealth fees are steadier. In other words, Zerodha is now trying to look less like Robinhood and more like Charles Schwab. Its rivals are reacting too. Groww has already overtaken Zerodha by active clients, with 6.6 million to Zerodha’s 6.4 million, largely by betting on long-term investors through mutual funds. Angel One, which once leaned heavily on F&O trading, has begun diversifying into insurance and AI-driven advisory after its stock lost a third of its value this year. The winners in this market are the ones with recurring, stable revenues; the losers are those overexposed to the “casino” side of finance.

Globally, this is not new. The UK banned payment-for-order-flow more than a decade ago. The US SEC is still wrestling with Robinhood’s model, where nearly 80% of revenue came from PFOF, and lawmakers continue to debate whether “free trading” is really free. In China, Ant Group’s IPO was torpedoed and an entire peer-to-peer lending industry was dismantled almost overnight. The message is consistent: fintechs that thrive on regulatory grey zones rarely enjoy longevity. India’s crackdown fits that pattern, though its approach is unique - instead of targeting the brokers, it has gone after speculative activity itself.

For Zerodha, the road ahead is complicated. If SEBI follows through on a full ban of weekly options, it could be forced to abandon the “free trading” model altogether and begin charging brokerage on equity delivery, a symbolic end to the zero-brokerage era in India. That shift would change user behavior, nudging retail investors toward mutual funds, PMS, and other regulated products. It also raises a larger question: can India’s fintech ecosystem, built during a decade of easy money and speculative risk-taking, reinvent itself for a future where compliance, investor protection, and sustainable economics matter more than rapid user growth?

The likely outcomes are clear. Smaller discount brokers will either disappear or be absorbed by the big players. The industry will move closer to wealth management and lending, where revenues are linked to assets under management rather than trading spikes. And Indian fintech valuations, which once rode on hyper-growth multiples, will settle closer to global standards for financial services firms. Zerodha may well survive, even thrive, by leaning into lending and wealth. But for India’s fintech sector as a whole, SEBI’s crackdown is more than a temporary pain - it is a reset. Painful in the short run, yes, but perhaps the only way to ensure that India’s retail investor story does not end in tears.

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“The Times They Are A-Changin’”: Goldman Sachs Sells Eternal Shares Worth INR 267 Cr & Eternal Allots ESOPs

Goldman Sachs has offloaded Eternal shares worth nearly ₹267 Cr in a bulk deal, with BoFA Securities stepping in as the buyer. At the same time, Eternal sweetened the pot for its workforce, doling out ESOPs worth ₹211 Cr under its 2021 and 2024 stock option plans.

Between big-ticket exits and hefty employee stock rewards, the Zomato-Blinkit parent is keeping both investors and insiders on their toes.

Read more here and here

“Jeena Isi Ka Naam Hai”: BNPL Startup Simpl Lays Off 80 Employees After RBI Whiplash

BNPL startup Simpl has hit a rough patch, laying off nearly 80 employees after the RBI ordered it to halt payment operations over licence issues.

Founder Nitya Sharma called it a necessary step to conserve capital as the company restructures. The move underscores how India’s fintech dream runs headlong into regulatory reality.

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“Puri Daal Hi Kaali Hai”: 25 Offshore Crypto Exchanges Stare At Ban Over PMLA Non-Compliance

India’s financial watchdog has cracked down on 25 offshore crypto exchanges, including big names like Paxful and LBank, for flouting anti-money laundering norms.

The FIU has even asked them to pull down their apps and websites for “operating illegally” in the country. It’s yet another reminder that while the government happily taxes crypto profits, the rules of the game remain murky.

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“Janmo Ke Saathi”: TBO Tek Completes Acquisition Of Classic Vacations For $125 Mn

Travel tech player TBO Tek has sealed its $125 Mn acquisition of luxury travel wholesaler Classic Vacations.

The brand will continue to run independently under CEO Melissa Krueger, curating high-end holiday packages across global hotspots. With this move, TBO Tek is stamping its passport into the luxury travel game.

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“Ek Dil Chahiye, Made In India”: Zoho Launches New Sub-Brand Vani To Offer Visual Collaboration Tools

Zoho has unveiled Vani, a new sub-brand focused on visual collaboration with tools like whiteboards, flowcharts, diagrams, and AI-powered content generation.

Priced at just ₹240 a month in India, it’s positioned as a pocket-friendly rival to global platforms. Coming hot on the heels of Arattai’s surge past 10 lakh downloads, Zoho is doubling down on its “Made in India, for the world” push.

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“Waah Kya Scene Hai”: Electronics Manufacturing Scheme Bags Proposals Worth INR 1.15 Lakh Cr

India’s electronics manufacturing scheme has pulled in proposals worth a whopping ₹1.15 Lakh Cr, far surpassing expectations.

With production estimates now pegged at over ₹10 Lakh Cr and job creation projected at 1.41 Lakh, the scheme is turning into a big employment engine. Sweetened with fiscal perks till FY32, it’s India’s big play to make chips and gadgets at home.

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“Abhi Hum Zinda Hai”: MobiKwik Powers Up Its Lending Game, To Infuse INR 10 Cr In NBFC Arm

MobiKwik is doubling down on lending, pledging to pump ₹10 Cr into its NBFC arm to back leasing and hire-purchase of big-ticket assets, from vehicles to aircraft.

The infusion will be rolled out in tranches by October 10 as the fintech eyes a stronger play in credit. But with widening losses and shrinking revenue, the bet comes at a tricky financial moment

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1. IPO-bound WeWork India has secured ₹1,348 Cr from 67 anchor investors, including big names like Goldman Sachs and ICICI Prudential. Nearly half of the allocation went to domestic mutual funds, signaling strong homegrown backing ahead of its public debut.
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2. Quick commerce unicorn Zepto is set to raise $400 Mn at a sky-high $7 Bn valuation, led by US pension fund Calpers. With heavy participation from existing backers, the round will mostly be fresh capital, fueling Zepto’s rapid expansion spree.
   Read more here