Zerodha's lending arm Zerodha Capital reports 78% rise in net profit to Rs 12.5 crore in FY25

Zerodha Capital, the non-banking finance arm of India’s largest stock brokerage firm Zerodha, more than doubled its income and expanded its loan book threefold last fiscal year, underscoring the growing appetite for credit products tethered to capital market assets.

The Bengaluru-based company reported a net profit of Rs 12.5 crore in FY25, up from Rs 7.2 crore a year earlier, while its total revenue surged to Rs 36 crore from Rs 17 crore in FY24, The Economic Times reported. The profit growth was driven by a sharp 3.2X jump in the company’s loan book, which touched Rs 381 crore in the first nine months of FY25.

Zerodha Capital lends exclusively against securities—stocks, mutual funds, and exchange-traded funds—offering loans between Rs 25,000 and Rs 10 crore at a loan-to-value ratio of 45%. According to the firm, over 1,300 securities are eligible as collateral.

Founded in 2021 and only beginning to scale in 2023, the company now disburses between Rs 80 crore and Rs 90 crore in loans each month. Unlike many fintechs chasing scale in unsecured lending, Zerodha Capital has kept its product narrowly focused and risk-averse. It does not offer personal or consumer durable loans, and the company has had zero non-performing assets (NPAs) since inception, as per ICRA.

Zerodha’s entry into lending comes at a time when competition is rising. IPO-bound Groww, which is backed by Peak XV Partners, had amassed a loan book of Rs 965 crore as of June 2024, driven by its broader product suite that includes unsecured personal loans.

But Zerodha Capital has avoided that path. With a gearing ratio of 1.4X and borrowings of around Rs 250 crore from banks and other NBFCs, the company says it will remain conservative. Term loans may be added soon, but it will not offer unsecured credit, according to company statements.

Zerodha Capital’s net worth stood at Rs 170–175 crore as of December 2024, with an additional Rs 125 crore infusion planned via compulsorily convertible preference shares from its parent group. ICRA has maintained a credit rating of AA- (Stable)/A1+ on the company and recently assigned the same rating to its proposed Rs 100 crore short-term borrowing plan.

Much of the company’s operational efficiency stems from its parent’s scale. Zerodha Broking had 8.1 million active NSE clients as of FY25, accounting for about 16% of India’s retail market share. The lending platform operates with a small team and relies heavily on digital execution. The future, however, may not be free of uncertainty. Zerodha’s fortunes—both in broking and credit—remain intertwined with the buoyancy of retail markets and regulatory sentiment.

Zerodha Broking posted a net profit of Rs 5,496 crore in FY24, delivering a return on net worth of 56%. For now, its lending arm remains a small but steadily growing contributor. Integration with mutual fund registrar CAMS is underway, which could widen the reach of Zerodha Capital beyond the brokerage’s captive customer base.