Zerodha has received SEBI approval to enter merchant banking, marking its expansion into a new financial services business beyond stock broking.
Zerodha is expanding deeper into India’s financial services industry after receiving approval from the Securities and Exchange Board of India to begin its merchant banking business.
Zerodha Corporate Advisors received SEBI’s approval on September 1, 2026, according to the company. The formal registration process is still pending, after which Zerodha will be able to start offering merchant banking services.
The brokerage had submitted its application to SEBI on April 27, 2026.
The move marks another expansion for Zerodha beyond its traditional stockbroking business, as the company builds a wider presence across India’s financial markets.
What Zerodha’s Merchant Banking Business Will Do
Merchant bankers help companies raise capital and manage transactions in India’s capital markets. Their responsibilities can include managing initial public offerings, follow-on offerings, and other securities issues, as well as advising companies on fundraising and related transactions.
Under SEBI’s regulatory framework, Category-I merchant bankers can undertake issue-management activities and provide advisory and management services for capital-market transactions.
Zerodha’s entry into the segment could therefore allow the company to participate more directly in the IPO and fundraising ecosystem, adding a new institutional business alongside its retail-focused brokerage operations.
Zerodha Expands Beyond Stock Broking
The merchant banking approval is part of a wider strategy at Zerodha to diversify its financial services operations.
The company has already expanded into asset management and lending through businesses including Zerodha Capital. Its Rainmatter platform has also invested in a range of fintech and other startups.
This approach gives Zerodha exposure to multiple parts of the financial ecosystem rather than relying only on brokerage revenue from retail investors.
The merchant banking business adds another layer by taking the company closer to corporate fundraising and capital-market transactions.
Focus on NRI Investors
Zerodha is also looking to expand its presence among non-resident Indian investors.
The push comes as SEBI considers changes to simplify Know Your Customer requirements for NRIs, which could make onboarding and account opening easier for investors based outside India.
Zerodha founder Nithin Kamath highlighted the opportunity in the company’s August business update, saying the NRI business was showing promise and that simpler onboarding could help the company grow further in the segment.
A larger NRI customer base could provide another growth opportunity for Zerodha as it expands its services beyond its core domestic retail audience.
IPO Market Creates an Opportunity
Zerodha’s move into merchant banking comes as India’s primary market activity has picked up after a slower start to the year.
According to Prime Database figures cited by Moneycontrol, 23 mainboard IPOs raised Rs 22,439 crore in August 2026. It was the highest number of mainboard IPOs launched in a single month so far this year.
July saw fewer issues but a higher amount raised. Twelve mainboard IPOs raised Rs 28,648 crore during the month.
With companies continuing to tap India’s equity markets for capital, merchant banking offers Zerodha an opportunity to participate in a growing part of the financial services industry.
A New Revenue Stream for Zerodha
The approval gives Zerodha a potential new business line at a time when the company is broadening its financial-services footprint.
While the merchant banking unit is still awaiting completion of its formal registration, the approval moves Zerodha one step closer to offering services related to IPOs, fundraising, and other capital-market transactions.
For a company best known for transforming India’s retail stockbroking market, the move into merchant banking signals a broader ambition. Zerodha is increasingly positioning itself across different segments of finance, from investing and lending to asset management and now corporate capital raising.
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