You won’t believe where India really trades: Zerodha's Nithin Kamath just spilled the truth

Zerodha CEO Nithin Kamath has challenged the popular belief that India's financial markets are booming with new traders from Tier 2 and Tier 3 towns, calling the narrative potentially misleading.

Despite Know Your Customer (KYC) data indicating geographic diversification, Kamath says much of the trading action still comes from India’s top 20 cities. In a recent post, he explained the discrepancy between users’ registered addresses and the IP data from where they actually trade.

“The bulk of trading activity is still concentrated in India’s top 20 cities,” Kamath stated, noting that many traders use addresses from smaller towns but operate from urban hubs like Bengaluru and Pune after relocating for work or education.

Zerodha data reveals a stark contrast: while only 38.58% of users list addresses in top cities, these areas account for a commanding 75.58% of IP traffic. Bengaluru, for example, represents just 3.67% of declared addresses but drives 10.51% of app activity. Similar disparities are seen in Mumbai and Pune.

Kamath warned that failing to distinguish between declared and actual user locations could lead to faulty conclusions about rural market penetration. While increased account openings may hint at broader inclusion, true engagement remains urban-centric.

This isn’t the first time Kamath has pushed back on market hype. Kamath emphasized that these findings reflect Zerodha’s internal metrics and might not represent the entire industry. Still, they serve as a crucial reality check: investor activity may be less decentralized than headlines suggest.