Zerodha CEO Nithin Kamath: 'You see a lot of activity from Pune and Bangalore because…'

Zerodha CEO Nithing Kamath has shared some insights on why cities like Pune and Bengaluru witness a surge in trading activity , despite reports suggesting a rise in retail investors from Tier 2 and Tier 3 cities . In a post shared on social media platform X (formerly known as Twitter), cautioned against misinterpreting Know Your Customer (KYC) data, which may not accurately reflect where traders are actually operating from. Kamath suggested that while data based on Know Your Customer (KYC) addresses indicate an increase from smaller towns, the reality of where actual trading takes place tells a different story.

Kamath highlights that a huge chunk of users, despite relocating to urban areas for work, often fail to update their registered addresses. This means their trading accounts may still be linked to their original Tier 2 or Tier 3 hometowns, creating a misleading impression of widespread participation from these areas. Many traders who relocate to urban hubs like Pune and Bengaluru for work do not update their registered addresses, leading to a discrepancy in reported trading locations. “You see a lot of activity from Pune and Bangalore because they are among the go-to destinations for people relocating for work,” Kamath stated.

There's a lot of talk about a huge influx of traders from Tier 2 and 3 towns. This data may be a little misleading. Let me explain.

If one looks at trading activity by looking at the addresses of users as per their KYC, you'll see a lot of users from Tier 2 and 3 towns.… pic.twitter.com/A5CoP1Bvrw

— Nithin Kamath (@Nithin0dha) May 20, 2025

According to Kamath, when analysing trading activity based on the IP addresses from which users log in, the bulk of the engagement still originates from India's top 20 cities. He also pointed out that cities like Pune and Bangalore as examples of this phenomenon. He noted that these metropolitan areas are "go-to destinations" for professionals seeking employment, which naturally leads to a high volume of trading activity originating from these locations.


Read Zerodha CEO Nithin Kamath ’s complete post here There's a lot of talk about a huge influx of traders from Tier 2 and 3 towns. This data may be a little misleading. Let me explain.

If one looks at trading activity by looking at the addresses of users as per their KYC, you'll see a lot of users from Tier 2 and 3 towns.

However, if you look at user activity by the IP addresses they use to log in, then the bulk of the activity comes from the top 20 cities. This is because most people don't update their address once they move to a different city.

This is why, for example, you see a lot of activity from Pune and Bangalore because they are among the go-to destinations for people relocating for work.

So yeah, you have to keep this in mind when drawing conclusions about investor participation, deepening of the markets etc.

Disclaimer: The data is based on our customers; it may or may not be true when compared to others