On August 29, 2019, between 10:00 AM and 10:40 AM, Zerodha experienced technical issues with its Order Management System (OMS). While order placements resumed after this period, clients who had open orders from before 10:00 AM that were executed during the affected window faced problems with additional margin blocks until their positions could be reconciled with the exchanges.

The root cause was identified as an unprecedented event: a single order for 10 lakh units of a sub-Rs 1 stock, placed around 9:40 AM on BSE, was executed in over 1 lakh individual trades. This highly unusual fragmentation of a single order, far exceeding the typical few hundred trades, caused an overload in the OMS, a scenario neither Zerodha nor its vendor, Refinitiv (formerly Thomson Reuters), had encountered before.

Refinitiv is actively working on a fix for the OMS to better handle such extreme cases of order execution. In the interim, Zerodha has implemented a temporary measure, limiting the maximum allowed quantity per equity trade order to 20,000 units.

For clients needing to trade larger quantities, this requires placing multiple orders. Zerodha plans to introduce basket orders on its Kite platform soon to minimize the inconvenience caused by this new limit, which affects a small percentage (less than 0.02%) of their client base.