Zerodha, the popular stock trading and investing platform, is set to invest between Rs 100 crore and Rs 125 crore (about $15 million) in its non-banking financial company (NBFC) arm, Zerodha Capital (ZCPL). This capital infusion, pending Reserve Bank of India approval, aims to grow its loan-against-securities (LAS) portfolio and broaden access to customers beyond Zerodha’s existing brokerage users.
Measured Growth with Conservative Risk Approach
The promoters’ investment will support ZCPL’s strategy to increase lending gradually while maintaining cautious risk management. The company has been steadily growing since launching retail lending operations in 2021. For fiscal year 2025, Zerodha Capital reported Rs 36 crore in revenue and Rs 12.25 crore in net profit, up from Rs 7.2 crore the previous year. This growth is credited to better capital efficiency and a shift toward external borrowing, whereas earlier operations relied solely on internal funds.
Industry Trend Towards Diversification
The move aligns with a broader trend among India’s leading online brokerages, which are expanding beyond traditional brokerage services. Competitors like Angel One and Groww have increased unsecured credit offerings, with sizable loan portfolios targeting salaried millennials and other customer segments. Regulatory pressures on futures and options trading and constraints on using idle client funds have encouraged digital investment platforms to diversify revenue streams.
Zerodha’s Unique In-House, Secured Lending Model
Unlike many competitors, Zerodha is focusing on a slower, secured lending model developed fully in-house. As of March 31, its LAS book reached nearly Rs 400 crore, with a low debt-to-equity ratio of 1.4x and a conservative loan-to-value ratio under 40 percent. The average loan size is approximately Rs 6 lakh, with around 6,400 active borrowers. The company is working with banks and other NBFCs for credit lines, planning to increase leverage to 3.5–4 times before raising additional equity capital.
Expanding Beyond Broking Customers
ZCPL currently serves only Zerodha’s brokerage customers, but plans are underway to expand. The company is negotiating API integration with CAMS (Computer Age Management Services) to allow users with mutual funds held outside demat accounts to pledge those assets for loans. This rollout is expected in the near future, enabling a more scalable and stable secured credit product compared to equity-backed loans, which tend to be more volatile.
Introduction of Term Loans
Zerodha is also developing term loans with durations up to three years. Unlike the current demand loans limited to one year, these term loans will feature monthly interest payments and principal repayment at maturity. The product targets customers needing structured, longer-term liquidity solutions.
Focus on Responsible Lending Without Unsecured Credit
Despite the growing popularity of digital unsecured loans, Zerodha has no plans to enter unsecured lending or co-lending partnerships. The company prioritizes responsible, risk-managed lending aligned with its long-term vision. Its LAS platform supports loans against mutual funds, ETFs, and listed stocks, utilizing real-time risk engines for monitoring loan-to-value and margin triggers. Disbursements start at around 45% LTV.
Organic Growth and Future Plans
ZCPL received its NBFC license in 2014 but began external lending operations only in 2021. It has grown quietly without marketing efforts, relying on organic expansion. Now, Zerodha is positioning its lending business as a visible and scalable product. The company aims to meet increasing demand for liquidity solutions that do not require selling investment portfolios. With more retail investors entering mutual funds and equities, Zerodha sees LAS as a natural growth area to be pursued responsibly.
