Zerodha Seeks SEBI Approval to Enter Investment Banking Business with Merchant Banking Licence

India's leading online brokerage platform Zerodha is set to expand its financial services portfolio by entering the investment banking segment. The company has applied to the Securities and Exchange Board of India (SEBI) for a Category I Merchant Banking Licence, a move that could significantly strengthen its presence in India's rapidly growing capital markets.

If approved, the licence will enable Zerodha to offer merchant banking services, including managing initial public offerings (IPOs), follow-on public offerings (FPOs), mergers and acquisitions, and other corporate fundraising activities.

Zerodha Applies for Category I Merchant Banking Licence

According to reports, the application has been submitted through Zerodha Corporate Advisors Private Limited, a group entity. The proposal was filed with SEBI in April and is currently under review by the market regulator.

Confirming the development, a Zerodha spokesperson said the company has applied for the licence but will share its detailed business plans only after receiving regulatory approval.

"We have filed an application for the Merchant Banking (Category I) licence with SEBI. We’ll be able to share more about our business plans once we receive the licence," the spokesperson said.

Strategic Expansion Beyond Stock Broking

The move marks another milestone in Zerodha's long-term strategy of evolving from a stock brokerage platform into a comprehensive financial services company.

Founded by Nithin Kamath and Nikhil Kamath, Zerodha has steadily diversified its offerings over the years. In addition to equity trading, the company now provides services across:

• Mutual funds
• Bonds
• Asset management
• Lending solutions
• Fixed deposit (FD) investments

Entering the investment banking business would further strengthen Zerodha's position in India's financial services ecosystem.

India's IPO Boom Driving Merchant Banking Growth

Zerodha's decision comes at a time when India's investment banking industry is witnessing robust growth, driven by a strong pipeline of IPOs, follow-on public offerings, qualified institutional placements (QIPs), and other capital market transactions.

As more Indian companies look to raise capital through public markets, demand for merchant banking services has increased significantly. Several established financial institutions have already expanded their investment banking operations to capitalize on this opportunity.

Some of the leading players in India's merchant banking sector include:

• JM Financial
• Kotak Mahindra Capital
• Axis Capital
• ICICI Securities

With regulatory approval, Zerodha could emerge as a new technology-driven competitor in this growing segment.

Zerodha's Financial Services Expansion Continues

The proposed investment banking venture follows several strategic initiatives undertaken by the company in recent years.

In September 2021, Zerodha received in-principle approval to launch its mutual fund business and partnered with wealth management platform Smallcase to expand its investment offerings.

More recently, in April 2026, the company introduced Fixed Deposit (FD) investments on its Coin platform. The feature enables investors to access fixed deposits from multiple banks through a single interface, simplifying portfolio management and making traditional savings products more accessible.

What Happens Next?

While Zerodha has initiated the application process, the company can begin offering merchant banking services only after receiving final approval from SEBI.

If the regulator grants the licence, Zerodha's entry into investment banking could reshape the competitive landscape by combining its technology-first approach with a rapidly expanding retail investor base. The move also reflects the company's broader vision of building a full-stack financial services platform catering to both retail investors and corporate clients.

Inputs from agency.