Bootstrapped stock broking platform Zerodha is preparing to enter the investment banking business, as it expands beyond broking and wealth management.

According to a report by Business Standard, the Bengaluru-based company has applied for a Category-I merchant banking licence with the Securities and Exchange Board of India (SEBI). The application was filed in April and is currently awaiting regulatory approval.

Confirming the development to Entrackr, a Zerodha spokesperson said, “We have filed an application for the merchant banking (Category 1) licence with SEBI. We’ll be able to share more about our business plans once we receive the licence.”

Once approved, the licence will allow Zerodha to manage initial public offerings (IPOs), advise companies on raising capital, and offer other merchant banking services.

The move comes at a time when India's IPO market is witnessing strong activity, with several startups and new-age companies preparing to go public over the next few years.

The licence could help build a full-stack capital markets business. Over the years, the company has expanded beyond stock broking into mutual funds, asset management, lending, startup investments through Rainmatter, and international investing. Investment banking would further strengthen its presence across the financial services ecosystem.

The approval of the licence could also intensify competition in the merchant banking space, which has traditionally been dominated by established players such as JM Financial, Kotak Mahindra Capital, Axis Capital, and ICICI Securities.

With hundreds of venture-backed companies expected to explore public listings over the next few years, Zerodha could emerge as another investment bank competing for these mandates. The company has confirmed that it has applied for the licence but has not disclosed its detailed plans.

Recently, Zerodha has launched fixed deposits (FDs) on its Coin platform, which will allow users to invest in FD schemes across partner banks and track their investments in a single interface. During FY25, its revenue from operations and profits for the firm dipped to Rs 8,847 crore and Rs 4,237 crore.