Zerodha gets SEBI nod to enter investment banking business
Zerodha has received SEBI approval to enter merchant banking, expanding into IPOs and equity fundraising as it diversifies beyond broking amid changing industry economics and rising primary-market activity.
Zerodha is set to enter India’s investment banking business after receiving approval from the Securities and Exchange Board of India for a Category-I merchant banking licence.
The move will take the brokerage beyond its traditional role of executing trades for investors and into advising companies on raising capital, giving it a new avenue for growth as the stockbroking industry adjusts to regulatory and competitive pressures.
Zerodha Corporate Advisors had applied to SEBI for the licence on April 27 2026, according to ICICI Direct. The application was for a Category-I merchant banker registration, which would allow the company to undertake activities including managing public issues and advising companies on capital raising. At the time of the application, the move was positioned as part of Zerodha’s broader expansion beyond its core broking business.
Responding to queries from YourStory, Zerodha confirmed that it has received the licence and will start operations over the next couple of months.
"We are growing our business into new verticals. Investment banking is a natural extension for us. We're starting with equity capital markets: IPOs, follow-on issues, and related advisory. The intent is to bring the same low-cost, no-hard-selling approach from the broking side over to issuers and investors," said Mohit Mehra, whole time director, Zerodha Corporate Advisors.
Zerodha will initially focus on equity capital markets, including initial public offerings (IPOs), follow-on issues and related advisory services. This will give Zerodha a role on both sides of the capital markets: its broking business connects investors with listed securities, while its merchant banking arm will work with companies looking to raise capital through the equity markets.
The move also follows a period of diversification at Zerodha. Alongside broking, the group has expanded into asset management, lending, wealth-related services and startup investing. The push comes as changes in the retail derivatives market and other regulatory measures have put pressure on parts of the traditional broking revenue model.
SEBI has also raised the financial bar for new Category-I merchant bankers. From January 2026, new applicants are required to have a minimum net worth of Rs 50 crore, compared with the earlier Rs 5 crore threshold, alongside a Rs 12.5 crore liquid net-worth requirement.
(The article has been updated with Zerodha's responses)