Investing in India - Points from Nitin Kamat, Zerodha

Trade volume

1.  90% of the trades made in Indian stock market is done by traders doing intraday. They are 3% of the DEMAT account holders
2. 97% of people are doing investing and not intra day
3. This 97% of people contribute insignificantly to the trade volume in India

Growth expectation by Venture capitalists

1. VC investors want growth. Not profitabilityFor VC, it is ok to spend 400 Rs for customer acquisition who will give 200Rs profit at the max
2. VC will have 7 year investment cycle
3. VC 1 will have to exit after 7 years, selling the share to another VC, who will have sell to another .
4. For first VC to exit and second VC to enter, there should be growth in the company.
5. If there is good growth and good potential for future growth, why will first VC exit after 7 years?
6. Where will he invest after exiting?
7. VC1 has to invest in another startup after exiting. Why not stay with the company where he has understood the business and know the founders for 7 years? 
8. If VC 1 is convincing the next VC that growth is going to be there, why VC1 is exiting ?

 

 Growth expectation by market

1. It is not enough for a company to make profit or stay sustaibable
2. Company has to keep growing. A company that does not grow will be de-valued even if it is sustaibable and is profit making. Example = Coin base
3. India , 140 crore people have less than 2 Lakhs per year.
4. They will not invest in stock market, even if brokerage is free.
5. Growth base for fintech companies is not the population, it is the IT paying population, less than 1% of the population.