Zerodha Receives SEBI Approval for Merchant Banking
Indian brokerage firm Zerodha has received approval from the Securities and Exchange Board of India (SEBI) to operate as a merchant banker through its subsidiary. The new venture will focus on initial public offerings (IPOs) for new-age companies.
Indian brokerage firm Zerodha has secured approval from the Securities and Exchange Board of India (SEBI) to commence merchant banking operations via its wholly-owned subsidiary, Zerodha Corporate Advisors Pvt Ltd. This move marks an expansion beyond the company's core stockbroking business.
The company stated that its merchant banking arm will initially concentrate on equity IPOs, particularly for emerging companies seeking to raise capital. "We are now setting up operations and expect to be up and running over the next few months," Mohit Mehra, whole-time director at Zerodha Corporate Advisors, told Inc42.
Zerodha has committed ₹55 crore (approximately $6.6 million) to its merchant banking division to meet net worth requirements under new regulations. The business has been established as a separate entity to ensure clear separation from broking activities and enhance compliance.
The expansion into merchant banking occurs as Zerodha's primary stockbroking revenue faces pressure. The company is also diversifying its offerings, with plans to introduce US stock investing and expand its mutual fund transaction services.