Zerodha, the Bengaluru-based discount brokerage founded by Nithin Kamath, has applied to India's Securities and Exchange Board for a Category-I merchant banking licence, a regulatory filing that would allow the company to manage initial public offerings, advise on mergers and acquisitions, and offer broader corporate finance services well beyond its roots as a low-cost trading platform. The application, filed through wholly owned subsidiary Zerodha Corporate Advisors Private Limited, was submitted in April 2026 and remains under SEBI review.
“We have filed application for the merchant banking (category 1) licence with Sebi,” a Zerodha spokesperson confirmed, adding that the company would share detailed business plans once the licence is granted. If approved, Zerodha would join more than a dozen other applicants — including Societe Generale Securities, InCred Capital Financial Services, Haitong Securities India and Capri Global Capital Markets — all seeking to enter India's merchant banking space at a time when SEBI has recently revised net-worth and liquid net-worth requirements for the category and introduced a framework requiring segregation of activities through separate business units.
The timing is not incidental. Zerodha's core broking business has faced mounting pressure over the past year: operating revenue fell 12 percent year-on-year to ₹8,847 crore in fiscal 2025, while net profit dropped 23 percent to ₹4,237 crore, a decline the company has attributed largely to SEBI's tightening of derivatives trading regulations and a higher securities transaction tax. Compounding the pressure, Zerodha has also been ceding ground in the retail brokerage race: newer entrants Groww and Dhan grew their active client bases by 8.1 percent and 7.1 percent respectively between October 2025 and April 2026, even as Zerodha's own base contracted by roughly 2 percent over the same period.
