Zerodha gets SEBI approval for merchant banking

Online brokerage firm Zerodha has received approval from the Securities and Exchange Board of India (SEBI) to enter the merchant banking business, broadening its presence across capital market services beyond stock broking.

Zerodha Corporate Advisors has been granted a Category-I merchant banking licence, allowing it to manage public issues, advise companies on fundraising, and offer services related to corporate transactions. 

The company had applied for the licence earlier this year.

The approval marks another step in Zerodha’s strategy to diversify its business as regulatory changes and evolving market conditions reshape the brokerage industry. The firm has been expanding into adjacent segments, including asset management, lending through Zerodha Capital, and startup investments via its Rainmatter platform. It has also established a presence in GIFT City to support international investment opportunities.

With the merchant banking licence, Zerodha can participate in IPO management, underwriting, mergers and acquisitions advisory, valuations, and other capital market transactions, enabling it to serve companies across a wider range of financial needs.

The move comes as the company’s earnings profile has shifted in recent years. While Zerodha remained profitable in FY26, its core broking income declined compared with previous years. At the same time, newer businesses such as margin trading facilities and interest-based income have contributed a larger share of overall revenue.