Media365
A public exchange between India’s two largest online investment platforms has reignited the debate over direct and regular mutual fund plans, after Zerodha founder and CEO Nithin Kamath defended the company’s low-cost investing philosophy and reiterated that it would continue offering direct mutual funds free of charge.
Kamath’s comments came days after reports that rival Groww had introduced MF Prime, a subscription-based offering aimed at investors seeking research-backed investment guidance. The product includes access to regular mutual fund plans, triggering questions over whether Groww was shifting away from its long-standing focus on direct mutual funds.
Without naming Groww, Kamath said Zerodha had built its business around the principle that investors should not pay more simply because they invest larger amounts.
“When we started the discount brokerage model in 2010, we decided to charge the same fee regardless of trade size because the effort to execute a trade is the same,” Kamath wrote in a post on X.
He said Zerodha followed the same philosophy when it entered the mutual fund business and delayed launching its Coin platform until it could offer only direct mutual fund plans.
“You can’t call yourself a discount or low-cost broker if you charge a percentage fee on transactions, because there’s no incremental effort in executing a larger order,” he said.
When we started the discount brokerage (flat fee per trade) model in India in 2010, we decided to charge the same fee regardless of trade size. The logic was simple: if the effort to execute a trade is the same, why should customers pay differently? We applied the same logic to… pic.twitter.com/we0sogPJdY
— Nithin Kamath (@Nithin0dha) July 9, 2026
Kamath said Coin has grown into India’s largest direct mutual fund platform, managing nearly Rs 1.6 lakh crore in direct mutual fund assets. He added that investors on the platform have collectively saved “thousands of crores” in commissions by investing through direct plans instead of regular ones.
He also observed that several platforms that launched direct mutual fund offerings around the same time as Coin had either shut down those services, changed their business models or were reconsidering their strategy. Despite that, he said Zerodha would continue to offer direct mutual funds at no cost.
Urging investors to check whether they were investing through direct or regular plans, Kamath said many people were still unaware of the difference. He added that Zerodha could help investors switch from regular to direct plans if they wished.
To illustrate the impact of costs, Kamath shared an example comparing a monthly SIP of Rs 5,000 in the DSP Large Cap Fund. According to the illustration, the investment would have grown to around Rs 19.5 lakh under the direct plan, compared with about Rs 18.3 lakh under the regular plan over the same period, with the gap reflecting distributor commissions.
Groww pushes back on claims of a shift
Groww responded with a detailed statement, saying there had been “confusion” and “misinformation” about its mutual fund offerings and stressing that direct mutual funds remained at the core of its platform.
The company said its existing users would see no changes in their investments, pricing or experience.
“Direct mutual funds are the heart of Groww,” the company said. “For every DIY investor, Groww stays exactly what it has always been: direct, zero-commission, and free. Forever.”
Groww said more than one crore investors have built mutual fund investments worth over Rs 1.9 lakh crore on its platform, making it the country’s largest mutual fund platform by investor base.
The company clarified that MF Prime was not a replacement for direct mutual funds but an optional service for investors looking for professional guidance.
“MF Prime is not a shift. It is an addition — a fully opt-in product for a different cohort: investors who want research-backed guidance on what to buy, hold, exit and rebalance,” Groww said.
It added that many prospective investors wanted to invest through the platform but were hesitant because they needed assistance in selecting and managing their portfolios. The new offering is intended to address that demand while leaving the experience for self-directed investors unchanged.
“Any commentary claiming Groww has changed its approach to mutual fund investing is simply incorrect,” the company said.
Direct vs regular plans under the spotlight
The exchange has once again brought the spotlight on the difference between direct and regular mutual fund plans.
Both invest in the same underlying portfolio managed by the same fund house. However, direct plans are purchased directly from asset management companies and do not include distributor commissions, resulting in lower expense ratios. Regular plans include commissions paid to distributors or advisers as part of their expense ratios, making them more expensive over time but often accompanied by advisory and portfolio support.
The debate also reflects the evolving business models of India’s online investment platforms. While Zerodha continues to position itself as a low-cost execution platform centred on direct investing, Groww is expanding its offerings to cater to investors who are willing to pay for investment advice and portfolio management while retaining its free direct mutual fund platform for do-it-yourself users.
With both companies serving millions of investors, the public sparring has brought renewed attention to the costs of investing and the trade-off between lower fees and professional guidance as India’s mutual fund industry continues to expand.
