Zerodha Moves To The Other Side Of The IPO Table

Zerodha is stepping into merchant banking, taking on established players in India’s booming IPO market.

Added to Saved Stories in Login VIEW SAVED STORIES .inc42-toggle-item-popup { display: none; position: relative; } .toggle-item-close { text-align: end; padding: 8px 12px 0px 10px; position: absolute; right: 0; cursor: pointer; } .toggle-items-content-main { display: block; position: relative; top: 27px; left: -204px; border-radius: 12px; background: #FFF; box-shadow: 0px 4px 24px 0px rgba(100, 100, 100, 0.25); width: 435px; height: 115px; } .toggle-items-content { display: flex; align-items: baseline; justify-content: center; padding-top: 22px; } .toggle-items-content .items-content-text .h4-saved-story{ color: #000; font-size: 20px; font-style: normal; font-weight: 700; line-height: normal; text-transform: capitalize; margin: 2px 0 10px 6px; } .toggle-items-content .items-content-text .myInc42-plus-dark { width: 100px !important; } .toggle-items-content .items-content-text .myInc42-light { width: 80px !important; } .toggle-items-content .items-content-text img{ height: 22px; } .view-my-feed-btn { width: 100%; text-align: center; display: flex; justify-content: center; } .view-my-feed-btn a { width: auto !important; } .view-my-feed-btn button { border-radius: 4px; background: linear-gradient(180deg, #DA1B4D 0%, #E23026 100%); color: #fff; font-size: 12px; display: inline-block !important; min-width: 162px; width: 162px !important; height: 34px !important; font-style: normal; font-weight: 700; line-height: normal; padding: 10px; cursor: pointer; } .CustomIconStyled { position: absolute; right: 180px; top: -80px; } .SubDropdownModelShare .sub-arrow-icon { width: 76px; height: 80px; position: relative; overflow: hidden; box-shadow: none; } @media (max-width:767px) { .toggle-items-content .items-content-text .h4-saved-story{ margin: 4px 0 10px 6px; font-size: 18px; } .toggle-items-content { align-items: center; } }

Zerodha does not want to go public itself. But it wants to be involved in almost everything that happens when another company does. 

“To run a brokerage firm is to live with contradictions,” Zerodha cofounder Nithin Kamath had written on Substack last month. 

“These contradictions have become harder to live with since the business took off post-2020. At least until then, the pursuit of revenue and profits made some of these contradictions easier to rationalize,” Kamath added.

It’s in this light that we need to study Zerodha’s new direction. 

Zerodha Corporate Advisors received a nod from the market regulator SEBI on September 1 to operate as a Category-I merchant banker. The subsidiary can now advise companies on IPOs, follow-on issues and other capital-market transactions, putting Zerodha in a business dominated by names such as Axis Capital, IIFL Capital, Kotak Investment Banking and Nomura. 

The company is expected to start its merchant banking operations over the next couple of months, with equity capital markets, including IPOs and follow-on issues, set to be the initial focus. 

For Zerodha, the move opens up a new source of fee income at a time when its core broking business is facing pressure from lower........

© Inc42