Zerodha Capital continued to grow its lending operations while maintaining profitability.
Zerodha Capital, the lending arm of Zerodha Group, continued to strengthen its position in India’s growing loan-against-securities market, reporting a 20.5% increase in net profit and significant growth in its lending portfolio during FY26.
According to rating agency ICRA, the Bengaluru-based non-banking financial company (NBFC) posted a net profit of Rs 14.7 crore for the financial year ended March 31, 2026, compared with Rs 12.2 crore in FY25. Total income rose 44.2% year-on-year to Rs 53.5 crore, reflecting growing demand for its lending products.
The company’s loan book expanded to approximately Rs 580 crore as of March 31, 2026, supported by Zerodha’s extensive customer base and its growing loan-against-securities (LAS) business.
Strong Growth in Lending Operations
Founded in 2021, Zerodha Capital focuses primarily on retail loans backed by shares and mutual funds. The company offers loans ranging from Rs 25,000 to Rs 10 crore, allowing investors to unlock liquidity without selling their investments.
The loans are typically issued at a loan-to-value ratio of around 50% against approved securities, with interest rates ranging between 10% and 11%.
The business model has gained traction as more investors seek alternative borrowing options that are often cheaper than unsecured personal loans.
Recently, Zerodha founder Nithin Kamath highlighted the gap between the popularity of personal loans and loan-against-securities products.
“I wonder why Loan Against Securities (LAS) is so unpopular. The fact that people with investments still take personal loans at a much higher rate surprises me. Personal loans typically have interest rates 5% to 10% higher than LAS,” Kamath noted.
Asset Quality Remains Strong
One of the key highlights of Zerodha Capital’s performance has been the quality of its loan portfolio.
The company reported nil gross non-performing assets (GNPA) as of March 31, 2026, indicating that its borrowers have continued to service loans without significant defaults.
Maintaining asset quality is particularly important in the loan-against-securities business, where collateral values can fluctuate with market movements.
ICRA noted that Zerodha Capital’s risk management framework, combined with the secured nature of its lending products, has helped maintain healthy portfolio performance despite rapid growth.
ICRA Reaffirms Ratings
Reflecting confidence in the company’s financial profile, ICRA reaffirmed Zerodha Capital’s long-term rating at [ICRA]AA- with a stable outlook and its short-term rating at [ICRA]A1+.
The agency also enhanced the company’s rated fund-based bank facilities from Rs 600 crore to Rs 900 crore, providing additional flexibility to support future growth.
At the same time, ICRA withdrew its rating on the company’s Rs 100 crore non-convertible debenture programme after confirming that no amount remained outstanding.
Leveraging Zerodha’s Ecosystem
A major advantage for Zerodha Capital remains its close integration with Zerodha Group.
ICRA highlighted the benefits of the shared brand, common promoters, operational support, and access to Zerodha’s large customer base.
As of April 30, 2026, Zerodha had 68.8 lakh active clients on the National Stock Exchange, accounting for approximately 15% of the industry’s active client base.
This provides Zerodha Capital with a significant opportunity to cross-sell lending products to investors who already hold securities through Zerodha’s brokerage platform.
Competition Intensifies
While Zerodha Capital has delivered strong growth, it remains relatively small compared with some competitors in the broker-backed lending segment.
Industry players have been aggressively expanding their financing businesses as investors increasingly seek liquidity against market-linked assets.
Groww reported a margin trading facility book of Rs 2,814 crore during the fourth quarter of FY26. Angel One reported an average client funding book of Rs 5,300 crore during FY26 and credit distribution of Rs 2,010 crore.
Against this backdrop, Zerodha Capital’s Rs 580 crore loan portfolio reflects both the opportunity ahead and the scale it still needs to achieve.
Key Challenges Ahead
Despite its growth momentum, ICRA noted that Zerodha Capital’s ratings remain constrained by its relatively modest scale and limited diversification of funding sources.
The agency also pointed out that the company’s loan portfolio remains exposed to market risks, technology risks, and fluctuations in the value of securities pledged as collateral.
As the company continues to expand, its ability to scale lending operations while maintaining strong asset quality will remain a critical factor for investors and rating agencies to monitor.
Vision for the Future
India’s loan-against-securities market remains significantly underpenetrated despite rising retail participation in equities and mutual funds.
With a growing customer base, strong asset quality, and support from one of India’s largest retail brokerage platforms, Zerodha Capital appears well-positioned to benefit from this opportunity.
The company’s FY26 performance suggests that demand for secured lending products is increasing, and if it can continue expanding its loan portfolio while maintaining prudent risk management, Zerodha Capital could become a more significant player in India’s evolving lending ecosystem.
Nithin Kamath, CEO of Zerodha
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