SEBI Category-I Merchant Banker Licence for Zerodha Arm
Why in the news
Zerodha, known for broking, is moving into investment banking after the market regulator approved a licence for its subsidiary.
Key facts
- Regulator: SEBI.
- Licensee: Zerodha Corporate Advisors, a Zerodha subsidiary.
- Category: Category-I merchant banker.
- Business ceiling for Category I: 20 times liquid net worth.
| Feature | Category I | Category II |
|---|---|---|
| Main-board public issues | Can manage | Cannot manage |
| Minimum net worth | ₹50 crore | ₹10 crore |
| Underwriting | Allowed | Not mentioned |
Zerodha’s plan
- Begin with equity capital markets: IPOs, FPOs and advisory work for both issuers and investors.
- Carry its broking approach of low-cost service without aggressive selling into the new line, stressing transparency and efficiency.
- Widen the business beyond broking into advisory and capital raising.
Exam angle
- Licence type: Category-I merchant banking.
- Net worth threshold: ₹50 crore (Cat I) vs ₹10 crore (Cat II).
- Only Category I can handle main-board public issues.
- Related terms: IPO, FPO, underwriting.