June 29, 2026 — In a major move to expand its financial empire, India’s top discount brokerage platform, Zerodha, is preparing to enter the investment banking sector. The Bengaluru-based fintech giant has officially applied for a Category-I merchant banking licence with the market regulator, the Securities and Exchange Board of India (SEBI).
The strategic application was quietly submitted in April and is currently awaiting final regulatory approval. A spokesperson for Zerodha confirmed the development, noting that the firm will share detailed business plans once SEBI grants the necessary green light. This upcoming venture marks a significant shift for the bootstrapped company, allowing it to transition from a retail trading platform into a full-stack, institutional financial services provider.
Diversifying Beyond Retail Broking
Founded in 2010 by brothers Nithin and Nikhil Kamath, Zerodha revolutionized the Indian stock market by pioneering the concept of low-cost discount broking. Over the last decade and a half, it has built a massive user base, currently boasting over 1.6 crore customers. However, as the retail broking space faces shifting revenue trends and tighter regulatory norms—reflected in a slight dip in Zerodha’s revenue to ₹8,847 crore in FY25—diversification has become the company’s primary focus.
The entry into investment banking is not an isolated experiment. Over the past few years, Zerodha has consistently scaled out its offerings to lock users into a broader financial ecosystem. Its current portfolio includes:
- Asset Management: Operating the Zerodha Fund House, focusing largely on passive and index-based mutual funds.
- Wealth Management: Providing Direct Mutual Fund investments through its “Coin” platform, which recently introduced fixed deposits.
- Startup Ecosystem: Backing early-stage fintech and health-tech innovations through its Rainmatter investment fund.
- Lending & Margins: Exploring margin funding and lending against securities to leverage its large asset base.
Securing a Category-I merchant banking licence is the next logical step. It provides the legal authority to manage Initial Public Offerings (IPOs), underwrite shares, orchestrate corporate restructurings, and advise businesses on institutional capital-raising.
Capitalizing on India’s Relentless IPO Boom
Zerodha’s decision to dive into merchant banking comes at a time when the Indian capital markets are experiencing unprecedented growth. India’s primary market is currently one of the most active globally. A long queue of domestic startups, tech unicorns, and venture-backed companies are waiting in line to list on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).
Traditionally, when a company decides to go public, it hires established investment banks like Kotak Mahindra Capital, Axis Capital, JM Financial, or ICICI Securities to manage the complex legal, financial, and promotional aspects of the IPO. By securing this licence, Zerodha can position itself directly at the negotiation table to win these lucrative corporate mandates.
Furthermore, Zerodha possesses a unique advantage that traditional investment banks lack: distribution power. When a merchant bank manages an IPO, a major chunk of the work involves marketing the shares to retail and high-net-worth investors. Since Zerodha already controls a massive market share of daily retail trading volumes in India, it can act as a bridge—sourcing corporate IPO mandates on one end and distributing those retail shares instantly to millions of active investors through its native Kite and Coin apps on the other.
Challenging the Old Guard
The investment banking landscape in India has long been dominated by deep-pocketed institutional giants and institutional bank-led brokerages. Zerodha’s entry is expected to shake up this hierarchy. Known for disrupting industries by cutting out hidden fees and offering clean, transparent user experiences, the tech-first firm will likely bring the same philosophy to corporate finance advisory.
While traditional investment banking relies heavily on personal networks and physical, relationship-driven deal-making, Zerodha could leverage data-driven tech stacks to streamline the compliance, book-building, and underwriting processes for mid-market corporates and modern internet startups. This tech-first approach could make capital-raising cheaper and more accessible for new-age founders who already use or resonate with the Zerodha ecosystem.
Looking Ahead
While the company remains tight-lipped about the exact rollout timeline, the industry is watching closely. The upcoming transition from managing individual retail portfolios to orchestrating multi-crore corporate listings will require a completely different operational playbook, including scaling up institutional sales teams and setting up strict compliance barriers to avoid conflicts of interest with its retail broking wing.
Nevertheless, if SEBI approves the application, Zerodha will solidify its status as a mature financial conglomerate. By closing the loop between corporate fundraising and retail investing, the company is positioning itself to capture value from every single corner of India’s fast-growing capital markets.