‘You Can’t Call Yourself…’: Zerodha’s Nithin Kamath Sparks Direct Vs Regular Mutual Fund Debate; Groww Responds

India’s two biggest mutual fund platforms have found themselves at the centre of a debate after comments by Zerodha founder Nithin Kamath sparked fresh discussion around direct and regular mutual fund plans. Although Kamath did not name any company, many investors believed his remarks were aimed at Groww’s newly launched MF Prime service.

The conversation soon shifted from one social media post to a wider discussion about costs, commissions and whether investors should pay for additional guidance.

Kamath Explains Zerodha’s Approach

Kamath shared his views in a post on X, where he defended Zerodha’s decision to continue offering direct mutual funds without charging investors. He said the company’s philosophy has always been to keep investing simple

and low-cost.

Referring to Zerodha’s early days, he wrote, “When we started the discount brokerage model in 2010, we decided to charge the same fee regardless of trade size.” According to Kamath, the same thinking shaped Coin, Zerodha’s mutual fund platform. He said the company launched Coin only after it could offer direct mutual fund plans, which do not include distributor commissions.

Kamath argued that investment platforms should not describe themselves as low-cost if they charge investors based on the size of their investments when the transaction itself remains the same. Talking about Coin’s growth, he wrote, “Anyway, @CoinByZerodha today is the largest direct mutual funds platform in India, with nearly Rs 1.6 lakh crores in direct MF AUM, and all our customers have saved thousands of crores in commissions. Direct mutual funds are a no-brainer if you’re a DIY investor.”

He also said that many platforms that started with direct mutual funds have either shut down or changed their business model over time. “It’s interesting that most of the direct MF platforms that started when we launched Coin have either disappeared or pivoted to something else. The few remaining platforms are also rethinking their choice of offering direct plans. However, at Zerodha, we will continue to offer direct mutual funds for free,” he added.

To explain why lower costs matter, Kamath shared an example of a monthly SIP of Rs 5,000 in the DSP Large Cap Fund. According to the illustration, the investment could grow to around Rs 19.5 lakh through a direct plan compared with about Rs 18.3 lakh through a regular plan over the same period because of distributor commissions.

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

Groww Issues Clarification

While Kamath never mentioned Groww, many users on X linked his comments to the company’s recently launched MF Prime service. A user wrote, “Direct jab at Groww’s new regular plan service.”

As the discussion picked up, Groww responded with a detailed clarification, saying there was “confusion and misinformation” around its mutual fund offerings. The company stressed that its core business continues to focus on direct mutual funds.

“Direct mutual funds are, and will remain, the heart of Groww. Over 1 crore investors have built more than Rs 1.9 lakh crore of mutual fund investments on our platform, making Groww the largest mutual fund platform in the country. For every DIY investor, Groww stays exactly what it has always been: direct, zero-commission, and free. Forever. We will keep shipping new features for direct MF investors,” the company said.

Groww explained that MF Prime is an optional paid service for people who want extra support with investing. According to the company, the service includes research-backed recommendations, portfolio reviews and guidance on whether to buy, hold or exit investments.

Clarifying that nothing has changed for existing users, Groww wrote, “If you are a DIY customer on Groww today, nothing changes for you. Not the plans, not the pricing, not the experience. Any commentary claiming Groww has changed its approach to mutual fund investing is simply incorrect.”

We’ve seen some confusion and some misinformation about Groww’s mutual fund offering. So let us be unambiguous.

Direct mutual funds are, and will remain, the heart of Groww. Over 1 crore investors have built more than ₹1.9 lakh crore of mutual fund investments on our platform,… https://t.co/GTzhpih7TL

— Groww (@_groww) July 9, 2026

Investors Share Their Views

The exchange between the two companies led to a broader discussion among investors about the value of direct versus regular mutual funds.

Some users supported Kamath’s stand on keeping investing low-cost, while others felt Groww’s optional advisory service gave investors more choice rather than replacing direct plans.

A user commented, “It is encouraging to receive a response from Groww. It is unwarranted to criticize a platform solely for providing Regular Funds through its related initiative. Nithin Kamath’s tweet was indeed surprising.”