Zerodha Corporate Advisors Pvt., a unit of Zerodha Broking Ltd., has obtained a merchant banking license listed on the Securities and Exchange Board of India's site as approved on Sept. 1. The move takes the group beyond pure broking into advising on and running initial public offerings and other capital-market work. Zerodha Broking, founded by billionaire Nithin Kamath, is India's second-largest broker.
The plan is to get the merchant banking arm live in the next couple of months. Mohit Mehra, a whole-time director at Zerodha, said the goal is to bring the online broker's low-cost playbook to this business.
India's equity pipeline is still stacked after two record fundraising years. SEBI has signed off on about 167 offers, with another 57 waiting in line, and potential multibillion-dollar issues from Jio Platforms Ltd. and National Stock Exchange of India Ltd. are on the watch list. August alone saw a record $10 billion of transactions priced, spanning IPOs, block trades and institutional placements.
The number of players is telling the same story. SEBI lists 249 registered merchant bankers, and 10 more firms have license applications in.
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The surge in listings has fattened paydays. Investment banks collected a record $417 million from IPO underwriting last year, as deal counts and ticket sizes climbed. According to LSEG, average IPO fees rose to 1.86% of deal value from 1.67% a year earlier. That tops the typical level in Hong Kong at about 1.5%, even though Hong Kong remains Asia's biggest equity fundraising hub.
Zerodha's move signals where the momentum is: in shepherding offerings through a crowded calendar that is spinning off record fees. More licensed bankers and fresh competition can shape how IPOs are structured and priced, and how often they filter down to everyday investors. If you pay attention to who is entering the arena now, you get a clearer read on where the action - and the costs - might show up next.
