Zerodha is set to expand beyond its traditional stockbroking business after its application for a merchant banking licence received approval from the Securities and Exchange Board of India (SEBI), Moneycontrol reported, citing sources familiar with the development. However, the final registration process with the market regulator is still pending.
The application was submitted by Zerodha Corporate Advisors on April 27, 2026. Earlier reports had indicated that SEBI was reviewing the application, with Zerodha confirming that it had sought approval for a merchant banking licence.
Zerodha prepares for investment banking entry
Once registered, the licence will allow Zerodha to participate in a range of capital market activities, including managing initial public offerings (IPOs), follow-on public offers (FPOs), rights issues and other fundraising transactions.
The move will mark Zerodha’s entry into the investment banking segment, placing it alongside established domestic and international financial institutions operating in the merchant banking space.
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 has steadily diversified 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.
IPO market revival boosts merchant banking opportunity
Zerodha’s entry could increase competition in the merchant banking industry, which is expected 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.
