Financial institution in a bustling Indian financial district.
Zerodha, a prominent Indian brokerage firm, is actively seeking regulatory approval from the Securities and Exchange Board of India (SEBI) to enter the investment banking sector. The company has submitted an application for a Category I merchant banking license through its wholly-owned subsidiary, Zerodha Corporate Advisors Pvt Ltd.
The application, filed on April 27, is currently under review by SEBI. A Category I merchant banking license permits companies to function as full-service merchant bankers, enabling them to manage initial public offerings (IPOs), provide advisory services for fundraising, and facilitate mergers and acquisitions.
This strategic move into investment banking signifies Zerodha’s ongoing efforts to diversify its business operations beyond its core broking services. The company has already established a presence in lending, asset management, and startup investments. Recently, Zerodha, along with other major Indian fintech platforms like Groww, Angel One, and Upstox, received approval from the International Financial Services Centres Authority (IFSCA) to offer access to international and US stocks via GIFT City.
The diversification push comes amidst a challenging market environment for broking companies. SEBI’s recent tightening of Futures and Options (F&O) regulations and a general slowdown in Indian equity markets have placed pressure on traditional revenue streams for brokers. Zerodha has also implemented customer-centric measures, such as waiving account maintenance charges for the first year and offering refunds on depository transfer fees, to attract and retain users in an increasingly competitive landscape.
According to recent data, Groww leads the Indian brokerage market in terms of active clients, followed by Zerodha and Angel One. Zerodha’s active client base saw a slight decrease between October 2025 and April 2026, while competitors like Groww and Dhan experienced growth during the same period. This competitive pressure is reflected in Zerodha’s financial performance, with operating revenue and net profit declining in FY25 compared to the previous year, attributed to regulatory changes and increased securities transaction tax.
Zerodha is one of several entities applying for SEBI’s merchant banking license, joining other notable applicants such as Societe Generale Securities, InCred Capital Financial Services, Haitong Securities India, and Capri Global Capital Markets.
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