For the fiscal year ending March 2025 (FY25), Zerodha Capital, the NBFC division of India’s biggest retail stockbroker Zerodha, reported an impressive performance, recording a net profit of ₹12.5 crore, a remarkable increase from ₹7.2 crore in FY24. Driven by digital efficiency, conservative risk controls, and strong support from its parent company, the company has solidified its position as an agile and lucrative fintech lender, with revenue more than doubling to ₹36 crore.
Credits: The Economic Times
Loan Book Soars 3.2x: The Engine Behind the Surge
At the heart of Zerodha Capital’s growth story lies its rapidly expanding lending portfolio. According to credit rating agency ICRA, the company’s loan book rose by 3.2x year-over-year to touch ₹381 crore by December 2024. Zerodha Capital focuses on Loans Against Securities (LAS), allowing retail investors to pledge stocks or mutual funds and borrow up to 45% of their value.
Offering loans ranging from ₹25,000 to ₹10 crore, the entire process is fully digital, providing seamless access and reducing turnaround time — a critical edge in India’s competitive lending landscape. This rapid scale-up in LAS, powered by automation and data-based eligibility checks, has been instrumental in the company’s profitability surge.
A Digital-First Strategy Backed by a Giant Parent
Zerodha Capital’s success has been tightly interwoven with the scale and credibility of Zerodha Broking, which commands over 8.1 million active clients on the NSE, translating to about 16% of India’s retail trading market. So far, the NBFC has limited its LAS offering to Zerodha customers. However, it now plans to expand to non-Zerodha users by integrating with CAMS, a leading mutual fund record-keeping platform.
This expansion strategy will open access to a larger pool of mutual fund investors, significantly widening the potential borrower base while retaining a fully digital, low-cost model.
Strong Financials, Zero NPAs: A Rare Lending Feat
In an industry where defaults are often a concern, Zerodha Capital stands out. Since its inception in 2021, the company has reported zero non-performing assets (NPAs) — an extraordinary achievement that speaks to its conservative underwriting, secured lending focus, and digital oversight.
With a net worth of ₹170 crore and a gearing ratio of 1.4x, the NBFC remains well-capitalized. Promoters are further planning to infuse ₹100–125 crore via compulsorily convertible preference shares to support loan book growth and maintain capital adequacy as expansion continues.
Credit Rating Agencies Approve: Trust Reinforced
Zerodha Capital has earned top ratings from both ICRA and CARE Ratings, reflecting its strong fundamentals. ICRA reaffirmed a long-term rating of [ICRA]AA- (Stable) and a short-term rating of [ICRA]A1+, while CARE Ratings assigned CARE AA- (Stable) and CARE A1+ for its instruments and ₹100 crore commercial paper borrowing program. These ratings validate the company’s risk-managed, growth-ready approach.
Parent Company Zerodha Broking Is Minting Profits
Zerodha Broking’s own performance in FY24 offers crucial context. The parent company reported a net profit of ₹5,496 crore, up 89% year-over-year, on revenues of ₹9,372 crore. With a return on net worth of ~56%, Zerodha Broking is among the most lucrative brokers in India. Its financial strength enables it to reinvest into subsidiaries like Zerodha Capital, fostering a self-sustained growth model without external capital pressure.
What’s Next: Expanding Products and Reach
Looking ahead, Zerodha Capital aims to expand beyond LAS. The company plans to introduce lending against a broader set of assets, integrate lending with third-party platforms, and develop automation tools and data-driven credit analytics. These tools will sharpen risk assessment and improve scalability.
However, the firm remains mindful of regulatory risks, especially as SEBI tightens norms around retail derivatives and securities markets — a segment that directly affects the company’s core customer base.
Credits: Money Control
Conclusion: A Small Lender with Big Ambitions
With its FY25 results, Zerodha Capital has established itself as a significant participant in India’s developing fintech lending market. It is in a unique position to grow responsibly since it is tech-driven, lean, and supported by one of the most lucrative financial institutions in the nation. Zerodha Capital has the potential to become a model for sustainable fintech lending as India’s need for collateral-backed credit increases.
