Zerodha set to invest up to Rs 125 crore in NBFC arm as loan book tops Rs 400 crore

This push comes at a time when India’s top online brokerages are aggressively diversifying beyond pure-play broking. Angel One is ramping up its unsecured credit distribution via a partner marketplace, with disbursals crossing Rs 700 crore, while Groww’s NBFC arm has built a Rs 965 crore unsecured personal loan book targeting salaried millennials.

With the regulatory environment tightening around futures & options (F&O) and restrictions on monetising idle client funds, digital investment platforms are increasingly turning to other segments that can be potential growth drivers.

Unlike its peers, Zerodha claims to be opting for a slower, secured, and fully in-house model.

"As of March 31, our LAS book had grown to nearly Rs 400 crore, with a 1.4x debt-to-equity ratio and a portfolio-level loan-to-value (LTV) under 40 percent. The average ticket size stood at Rs 6 lakh across around 6,400 active clients," Zerodha Capital's Abhilash said.

"We’ve now begun working with a few banks and NBFCs for credit lines and plan to increase gearing to 3.5–4x before raising further equity.”

Moving Beyond Broking Users

Until now, ZCPL has exclusively catered to Zerodha Broking’s customer base, which may now change. The company is in advanced discussions to integrate APIs with CAMS (Computer Age Management Services), allowing users who hold mutual funds outside of demat accounts to pledge them for loans.

“The idea is to allow users with mutual funds in non-demat form to seamlessly pledge them via API integrations and draw loans through our platform,” said Abhilash, adding that initial rollout is expected in the coming months.

Zerodha views mutual fund–backed loans as a more scalable and stable secured credit product than equity-backed loans, due to their lower volatility. The company is also working on introducing term loans with tenures of up to three years. Currently, it only offers demand loans with a cap of one year.

“For the term product, customers will pay interest monthly and repay the principal at maturity. It’s being designed for more structured, longer-term liquidity needs,” he said.

Staying Away from Unsecured Credit

Despite the market’s growing appetite for digital credit, Zerodha has no plans to enter unsecured lending or participate in co-lending arrangements.

“Chasing revenue is not our objective. The focus is on building a responsible, risk-managed, and tech-driven lending business aligned with our long-term philosophy,” Abhilash said.

Zerodha’s LAS stack is fully built in-house and supports loans against mutual funds, ETFs, and listed stocks. The platform uses real-time risk engines to monitor LTVs and margin triggers, with disbursement beginning around 45 percent LTV.

While other fintech NBFCs are racing to scale via unsecured or partner-led lending, Zerodha sees little reason to follow suit. “Many NBFCs turn to co-lending because raising capital competitively is a challenge. That’s not an issue for us. If we need capital, the group can fund us directly,” said Abhilash.

A Clearer Push

ZCPL received its NBFC license in 2014 but began external lending only in 2021, following internal pilots for employee loans. The company has grown quietly so far, without marketing or publicity.

“We’ve reached where we are without any promotion. It’s entirely organic,” said the NBFC head. “Now, for the first time, we’re preparing to position this as a more visible and scalable product.”

Even with its expanding scope, Zerodha maintains that its lending business will grow deliberately. “There’s growing demand for liquidity without selling portfolio assets,” he said. “With more retail investors entering mutual funds and equities, LAS is a natural product to scale—but we’ll do it in a responsible, product-led way,” said Abhilash SR.