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Zerodha is preparing to enter the investment banking business as it looks to expand beyond stock broking and wealth management. The Bengaluru-based company has applied for a Category I merchant banking licence from the Securities and Exchange Board of India. The application was filed in April and is currently waiting for regulatory approval.
A Zerodha spokesperson confirmed the application and said the company will share more details after receiving the licence. SEBI’s approval will allow Zerodha to offer several new financial services. These services include managing initial public offerings, helping companies raise money, and providing corporate advisory services.
The move comes at a time when India's IPO market continues to grow. Many startups and new-age companies are preparing to launch public offerings over the next few years. This growing pipeline creates fresh opportunities for investment banks that help companies enter the stock market.
A merchant banking licence will help Zerodha build a stronger presence across India's capital markets. The company has already expanded well beyond its original broking business. It now offers mutual funds, lending services, asset management, startup investments through Rainmatter, international investing, and fixed deposits through its Coin platform.
Investment banking could become another important business for the company. It would also reduce its dependence on brokerage income by creating new revenue from IPO management and corporate finance services.
The expansion could also increase competition in India's merchant banking industry. Large firms such as JM Financial, Kotak Mahindra Capital, Axis Capital, and ICICI Securities currently handle most IPO and fundraising deals. Zerodha could become another strong player, especially for startups and technology companies looking for digital-first financial services.
Several companies have also applied for merchant banking licences as India's public markets continue to attract new businesses. Industry experts believe stronger competition could improve services and create more options for companies planning to raise capital.
Zerodha's latest move shows how fintech companies are expanding into traditional financial services. More competition could improve IPO services, give businesses more choices, and make India's capital markets stronger over the coming years.
The company recently launched fixed deposit investments on its Coin platform, allowing customers to invest across partner banks from one place. During FY25, Zerodha reported revenue of Rs. 8,847 crore and net profit of Rs. 4,237 crore. Expanding into investment banking could help the company build new income sources while supporting future growth.
The company still needs SEBI approval before starting merchant banking operations. If the regulator grants the licence, Zerodha will join India's growing list of full-service financial companies and compete for IPO and fundraising mandates in the years ahead.
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