Zerodha Capital, the non-banking financial company (NBFC) arm of Zerodha, has reported a significant financial performance for the fiscal year ending March 2025 (FY25). The company’s net profit surged by 78% year-on-year, reaching ₹12.5 crore, while its revenue more than doubled to ₹36 crore.
Strategic Growth in Lending Operations
Established in 2021, Zerodha Capital specializes in providing loans against securities (LAS), allowing investors to use their stock, mutual fund, and ETF holdings as collateral. This approach has enabled the company to offer loans ranging from ₹25,000 to ₹10 crore, with a loan-to-value ratio of up to 45%.
In FY25, the company’s loan book expanded significantly, growing to ₹381 crore in the first nine months, a 3.2x increase from the previous year. This growth was facilitated by a shift from internal funding to external borrowings, with Zerodha Capital raising approximately ₹250 crore from banks and other NBFCs.
Conservative Risk Management and Future Plans
Zerodha Capital maintains a conservative risk profile, focusing solely on secured lending and avoiding unsecured loans. The company plans to introduce term loans in the coming months, expanding its product offerings while continuing to serve primarily Zerodha’s existing client base.
To support its growth trajectory, Zerodha’s promoters are preparing to infuse up to ₹125 crore into the NBFC arm through compulsorily convertible preference shares, pending regulatory approval.
Competitive Landscape and Market Position
Zerodha Capital’s strategic focus on secured lending differentiates it from competitors like Groww and Angel One, which have ventured into unsecured personal loans. By leveraging Zerodha’s substantial client base of over 8 million active users on the NSE, Zerodha Capital aims to solidify its position in the financial services market.
Financial Health and Credit Ratings
As of December 2024, Zerodha Capital’s net worth stood at ₹170 crore, with a debt-to-equity ratio of 1.4x. The company has maintained a strong credit profile, with ICRA assigning it a rating of AA- (Stable)/A1+ and noting the absence of non-performing assets (NPAs) since inception. Entrackr
Conclusion
Zerodha Capital’s impressive financial performance in FY25 reflects its strategic execution and conservative approach to lending. With plans to expand its credit offerings and a focus on secured lending, the company is well-positioned to navigate the evolving financial landscape and contribute to Zerodha’s broader growth objectives.
