Zerodha Gets SEBI Approval For Merchant Banking Licence

Zerodha, a leading online brokerage firm, has received approval from the Securities and Exchange Board of India (SEBI) for a merchant banking licence. The approval was given to Zerodha Corporate Advisors, which had submitted the application on April 27, 2026. Although the final registration process is still pending, this development marks a significant expansion of Zerodha's business beyond its traditional stockbroking activities.

The merchant banking licence will enable Zerodha to participate in various capital market activities, including managing initial public offerings (IPOs), follow-on public offers (FPOs), rights issues, and other fundraising transactions. This move will place Zerodha alongside established domestic and international financial institutions operating in the merchant banking space.

Zerodha has been steadily diversifying its business portfolio beyond online brokerage. The company has entered areas such as asset management, lending through Zerodha Capital, and investments through its proprietary fund. It has also secured registration from the International Financial Services Centres Authority (IFSCA) as a broker-dealer in GIFT City, allowing it to facilitate overseas investment opportunities for Indian investors.

The development comes at a time when India's primary capital market is attracting growing interest from fintech companies and financial services firms seeking to expand their offerings. Zerodha's entry into the merchant banking industry is expected to increase competition, which is anticipated to benefit from a strong pipeline of IPOs and other capital-raising activities.

As of August 31, 2026, SEBI had 248 registered merchant bankers. The regulator's data also showed several applications for merchant banking registration under review, including those from firms such as Haitong Securities India, Houlihan Lokey Advisory India, and Societe Generale Securities India.

India's IPO market experienced a slowdown in the first half of 2026 due to geopolitical uncertainty and volatile market conditions, leading several companies to postpone their listings. However, activity improved significantly in July and August, with the two months accounting for a large share of the total IPO funds raised during the year.

The approval of Zerodha's merchant banking licence is a significant development for the company and the Indian capital market. It is expected to increase competition in the merchant banking industry and provide more opportunities for investors. With its strong track record in online brokerage and its expanding business portfolio, Zerodha is well-positioned to make a significant impact in the merchant banking space.

The growth of the merchant banking industry is expected to continue, driven by the increasing demand for capital-raising activities and the expanding presence of fintech companies and financial services firms in the Indian capital market. Zerodha's entry into this space is a testament to the company's commitment to innovation and its desire to provide a wide range of financial services to its customers.

In conclusion, Zerodha's approval for a merchant banking licence is a significant development for the company and the Indian capital market. It is expected to increase competition in the merchant banking industry and provide more opportunities for investors. With its strong track record in online brokerage and its expanding business portfolio, Zerodha is well-positioned to make a significant impact in the merchant banking space.