Zerodha Capital, the lending arm of India’s largest retail stockbroker Zerodha, has reported a net profit of ₹12.5 crore for the financial year ending March 2025 (FY25), reflecting a sharp rise from ₹7.2 crore in FY24. Backed by a fast-growing loan book and robust digital operations, the NBFC has more than doubled its income to ₹36 crore from ₹17 crore last year.
Loan Book Grows 3.2X, Drives Profit Surge
The key driver of the company performance was a significant jump in its lending portfolio. As per credit rating agency ICRA, the firm’s loan book expanded 3.2 times year-over-year, reaching ₹381 crore by the end of December 2024. The company offers loans against securities (LAS) to retail investors, allowing them to borrow by pledging stocks or mutual funds.
the company provides loans ranging from ₹25,000 to ₹10 crore, lending up to 45% of the value of pledged securities. The process is fully digital, allowing seamless access for clients.
Built on Zerodha’s Massive Client Base
Utilising the scale of its parent company, the company has begun to strategically introduce lines of business to leverage significant potential business activity. Zerodha Broking has approximately over 8.1 million active clients on NSE, amassing around 16% of the Indian retail trading market. Currently, the NBFC only provides a LAS to Zerodha users but will look to expand the LAS services to non-Zerodha mutual fund investors via integration with CAMS.
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Healthy Balance Sheet and Zero NPAs
the company’s financial health remains solid. According to ICRA, the company’s net worth stood at ₹170 crore as of December 2024, with a gearing ratio of 1.4x, indicating prudent use of debt. Notably, the firm has maintained zero non-performing assets (NPAs) since inception in 2021 a rare feat in the lending industry.
To fuel further growth, the company’s promoters plan to infuse ₹100-125 crore via compulsorily convertible preference shares. This will support the expansion of the lending book and maintain capital adequacy.
Top Credit Ratings Reflect Strong Fundamentals
Leading credit rating agencies have reaffirmed their confidence in Zerodha Capital. ICRA has maintained a long-term rating of [ICRA]AA- (Stable) and a short-term rating of [ICRA]A1+, including for its ₹100 crore commercial paper borrowing program. CARE Ratings has also assigned CARE AA- (Stable) and CARE A1+ for long and short-term instruments, respectively.
Although the firm is still small in size and has limited lender diversity, its backing from Zerodha Broking and conservative lending approach have strengthened its credibility.
Parent Company Zerodha Broking Delivers Record Profits
Zerodha Capital’s excellent performance followed the same trajectory of its parent company. Zerodha Broking Limited reported a net profit of ₹ 5,496 crore for FY24, a whopping 89% increase from FY23! The revenue earned stands at ₹ 9,372 crore, which by my calculations will allow Zerodha Broking’s return net worth to be around 56%, making it among the most lucrative brokers in India.
Continuing its lucrative earnings from Zerodha enhances Zerodha’s ability to reinvest into opportunities including subsidiaries such as Zerodha Capital without spurring the need for additional capital and in times further cementing its self-sustained growth proposition for the group.
Future Outlook: Scaling Products and Expanding Access
The company is preparing to scale its products and customer base. Plans include offering loans against a greater variety of assets, offering lending products on third-party platforms, and building automation tools, and data-based credit analytics, to streamline its operations and control risks. However, growth is contingent on market sentiment and changes in regulations, particularly in the retail derivatives space, which is being closely monitored by SEBI in the last several months.
A Lean and Profitable Fintech Lender
The FY25 results for the company show a nimble, technology-enhanced, and customer driven lending model. With a profitable parent company, strong asset quality, and the ever-growing market, Zerodha Capital is positioned to emerge as a major player in India’s rapidly changing digital lending ecosystem. Zerodha Capital has the chance to maintain its trajectory of growth as it continues to innovate and keep up with the growing demand for collateral-backed lending from retail investors with strong risk controls and sustainable growth.
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