Zerodha receives SEBI approval for merchant banking business

Indian stockbroker Zerodha has received approval from the Securities and Exchange Board of India (SEBI) to operate as a merchant banker through its wholly owned subsidiary, Zerodha Corporate Advisors. This move marks a significant expansion for the company as it seeks to diversify its revenue streams beyond its core retail broking business.

As a Category-I merchant banker, the new entity will be able to manage initial public offerings (IPOs), advise companies on equity fundraising, and handle capital-market transactions. Mohit Mehra, whole-time director at Zerodha Corporate Advisors, stated that the firm will initially focus on equity IPOs, particularly for new-age businesses looking to raise public capital. The company has established this business within a separate entity to ensure compliance safeguards and maintain a clear separation from its brokerage operations.

The expansion comes amid a period of diversification for Zerodha, which has already moved into asset management, lending, and fintech investments. The push into merchant banking coincides with a resurgence in India’s IPO market, following a period of weaker activity earlier in the year.