A seemingly ordinary post by Zerodha founder and CEO Nithin Kamath on X sparked an unusual public exchange between two of India's biggest investment platforms, with Groww responding hours later with a detailed clarification. The discussion brought attention to a larger debate within the investment industry: whether online platforms should focus exclusively on direct mutual funds or also provide regular plans that include advisory services.
Revisiting Zerodha's original philosophy, Kamath said the company had always believed investors should not be charged more simply because they invest higher amounts.
"When we started the discount brokerage model in 2010, we decided to charge the same fee regardless of trade size," he wrote on X.
He said Zerodha applied a similar principle to mutual funds, explaining that the company launched its Coin platform only after it was able to offer direct mutual fund plans exclusively.
Kamath argued that platforms cannot describe themselves as "discount" or "low-cost" if they impose percentage-based charges when the effort required to execute transactions remains unchanged.
He also pointed to Coin's growth, stating that the platform now manages nearly Rs 1.6 lakh crore in direct mutual fund assets and has helped investors save "thousands of crores" in commissions.
The most pointed part of his post came when he noted that several direct mutual fund platforms launched around the time of Coin had either "disappeared or pivoted," adding that "the few remaining platforms are also rethinking their choice of offering direct plans."
Although Kamath did not name Groww, the comments came shortly after reports suggested that Groww had introduced regular mutual funds through its new Groww Prime offering, making the reference apparent to many observers.
Responding to what it described as "confusion and misinformation" surrounding its mutual fund services, Groww issued a clarification on X.
The company emphasised that direct mutual funds remain central to its business model.
"Direct mutual funds are, and will remain, the heart of Groww."
Groww said more than 1 crore investors have accumulated mutual fund investments worth over Rs 1.9 lakh crore through its platform, making it India's largest mutual fund platform.
The company reiterated that investors who prefer a do-it-yourself approach will continue to receive direct mutual funds without any cost or commission.
Groww explained that its newly introduced MF Prime is not intended to replace direct plans. Instead, it is an optional offering for investors seeking research-based recommendations, portfolio assessments and guidance on investment decisions.
"If you are a DIY customer on Groww today, nothing changes," the company said, adding that claims suggesting it had moved away from direct mutual funds were "simply incorrect."
Unlike Groww's traditional platform, which focused entirely on direct mutual funds, Groww Prime provides an advisory-based investment option that includes regular mutual fund plans for users who voluntarily choose the service.
Regular mutual funds include distributor commissions within their expense ratios, whereas direct plans do not carry those charges. Over extended investment periods, the difference in costs can significantly affect returns.
Groww said Prime is designed for investors who prefer professional assistance instead of managing investments independently, while its direct mutual fund offering continues unchanged.
Industry observers view the public disagreement as a reflection of two contrasting approaches to wealth management.
Zerodha has long promoted low-cost, self-directed investing through its flat brokerage model and commission-free direct mutual fund platform.
Groww, founded in 2016 by former Flipkart executives Lalit Keshre, Harsh Jain, Neeraj Singh and Ishan Bansal, initially built its reputation around direct investing before gradually expanding into a broader wealth management platform.
With Prime, Groww is attempting to serve investors who are willing to accept the additional cost associated with regular plans in exchange for research and portfolio support.
The exchange between the two companies highlights the importance of understanding the differences between direct and regular mutual funds.
Direct mutual funds generally have lower expense ratios because they do not include distributor commissions. Regular plans, while carrying those additional costs, may provide advisory and distribution support.
The choice ultimately depends on an investor's preference—whether they want to manage their investments independently or seek professional guidance while making financial decisions.
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