Zerodha's Nithin Kamath takes a dig at Groww? Viral post sparks debate on direct vs regular mutual funds
Amid Groww’s recently launched MF Prime service, Nithin Kamath’s comments on direct mutual funds have sparked a discussion around investment costs, advisory support and whether digital platforms should focus only on low-cost plans or offer more services to investors.
Nithin Kamath says many direct MF platforms that started alongside Coin have either exited or changed their approach.
What happens when two of India’s biggest investment platforms find themselves on opposite sides of a debate over how people should invest? A conversation around mutual fund costs soon turned into a public discussion about fees, financial advice and investor choice.
The exchange began after Zerodha founder and CEO Nithin Kamath shared his views on direct mutual funds and defended the company’s decision to continue offering them free of charge. His post quickly caught the attention of investors, with many users linking his comments to Groww’s recently launched MF Prime service.
Groww later responded, saying there was “confusion and misinformation” about its mutual fund offerings. The discussion between the two platforms has brought back a key question for mutual fund investors on whether they should direct or regular mutual fund plans.
Nithin Kamath on why Zerodha continues to back direct mutual funds
Kamath’s comments came through a post on X, where he explained Zerodha’s long-standing focus on keeping investing simple and affordable. He said the company followed the same principle when it entered the brokerage industry more than a decade ago.
“When we started the discount brokerage model in 2010, we decided to charge the same fee regardless of trade size,” he wrote.
According to Kamath, Zerodha brought this approach to mutual funds through Coin, its investment platform. He said the company launched Coin only after it was able to offer direct mutual fund plans.
Kamath argued that platforms should not call themselves low-cost or discount services if they charge fees based on the amount invested, especially when the actual transaction process 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.”
Kamath also pointed out that several platforms that entered the direct mutual fund space earlier had changed their approach over time. He explained, “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.”
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
To explain why costs matter over time, Kamath shared an example comparing a monthly SIP of Rs 5,000 in the DSP Large Cap Fund. According to the example, the investment could grow to around Rs 19.5 lakh through the direct plan, while the regular plan could reach about Rs 18.3 lakh over the same period. The difference was linked to distributor commissions included in regular plans.
Why Groww came into the conversation
Although Kamath did not name any company in his post, many users believed his comments were linked to Groww’s new MF Prime offering.
The timing of the post led investors on X to discuss whether Zerodha was indirectly responding to Groww’s move towards offering regular mutual fund services. A user commented, “Direct jab at Groww’s new regular plan service.”
Groww responds to the debate
As discussions around the post increased, Groww issued a clarification on X, saying its approach towards direct mutual funds had not changed.
The company said, “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.”
Groww explained that MF Prime is an optional service created for investors who want additional support while managing their investments. The company said the service offers features such as research-backed recommendations, portfolio reviews and guidance on decisions related to buying, holding or exiting investments.
Clarifying its position, Groww said, “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
As Groww’s clarification spread online, some users welcomed the response and questioned the criticism of offering regular funds. One 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.”
Direct vs regular mutual funds: What is the difference?
Both options invest in the same mutual fund scheme managed by the same asset management company. The difference is mainly in the way investors access these funds.
Direct mutual funds are bought directly from the fund house without involving distributors. Since there are no distributor commissions, they usually have lower expense ratios. Over a long period, this lower cost can help investors retain a larger portion of their returns.
Regular mutual funds involve distributors or advisers who help investors with investment decisions. The commission paid to these intermediaries is included in the expense ratio, making regular plans costlier.
However, regular plans can be useful for investors who want guidance, portfolio reviews or help in making investment decisions. For investors who understand mutual funds and prefer managing their own portfolios, direct plans may be a suitable choice. Those who need professional support may find regular plans more useful.
Disclaimer: This report is based on user-generated content shared on social media. Moneycontrol has not independently verified the claims and does not endorse them.