Merchant Banker Registration with SEBI
Merchant banker registration with SEBI is what lets a company act as lead manager for public and rights issues. The rules were tightened from January 2026: higher capital, liquid net worth, certified staff and no outsourcing of core work. We prepare the file, shape the entity and handle the SEBI portal filing.
What it is
A merchant banker is a SEBI-registered intermediary that manages the issue of securities: due diligence, offer documents, pricing support and allotment coordination. Without a certificate of registration from SEBI, no company can take up that work. Section 12(1) of the SEBI Act, 1992 makes the certificate compulsory.
The licence is governed by the SEBI (Merchant Bankers) Regulations, 1992, as amended in December 2025 with effect from 3 January 2026. You apply through the SEBI Intermediary (SI) portal. The recent amendments set new figures for Category I and Category II merchant bankers, so an application today faces a tougher bar than one filed in 2025.
Who it applies to
New investment banking arms
Picture a promoter group that has run a broking house for years and now wants to manage IPOs. It needs a clean entity, the right capital and a qualified team before it applies.
Broking, lending and research groups
If the group already trades, lends or publishes research, the merchant banking business must be ring-fenced. Information barriers, restricted lists and pre-clearance of staff trades are now expected.
Existing merchant bankers
Registered firms must re-categorise with CA-certified details by 2 January 2027 and meet the capital figures by 2 January 2028. In practice, we run a quick gap test on your numbers and staff first.
Why it matters
You cannot lead-manage without it
A company planning an IPO or rights issue can appoint only a registered merchant banker. The certificate is your entry ticket to the mandate.
The bar has moved up
Here is the catch: net worth, liquid net worth, staffing and revenue tests all changed in 2026. Plan the capital structure first; it saves a rejected or delayed application.
Governance is part of the licence
Risk and compliance committees, an independent compliance officer and conflict policies are checked, not just promised.
Documents required
About the company
- Certificate of incorporation, MoA and AoA with merchant banking as an object
- Latest audited financials and a net worth certificate from a practising CA
- PAN, GST registration and proof of office premises
About the people
- KYC and experience details of directors and the principal officer
- NISM Series IX certificates for qualified staff; NISM Series III-A for the compliance officer
- Degree proofs of at least two qualified professionals in finance, law or business management
Policies and declarations
- Information barrier and restricted list policy
- Conflict of interest, personal trading and pre-clearance policies
- Risk and compliance committee terms of reference; fit and proper declarations
How it works
Check eligibility and category
We review your entity, capital, people and group businesses against the amended regulations, and tell you honestly if a gap needs fixing first.
Build the entity
We prepare the object clause change or the new company, plan the capital to be infused and help you map the qualified staff and compliance officer.
File the application
We prepare the application and annexures and file them on the SEBI Intermediary portal, with the CA net worth certificate attached.
Reply to SEBI queries
SEBI usually raises queries. We draft the replies, track each open point and coordinate any clarification you need to give.
Pay fees and start compliance
On grant, you pay the fees SEBI specifies. We set up the compliance calendar for certifications, reporting and the semi-annual underwriting certificate.
Timelines
3 January 2026
Amended merchant banker regulations came into effect. New applicants are assessed on the higher framework from day one.
3 April 2026
Ban on outsourcing core functions began, and the compliance officer independence requirement applies from this date.
2 January 2027 and 2 January 2028
Re-categorisation with CA certificates by 2 January 2027; full capital and liquid net worth by 2 January 2028. A principal officer with 5 years of merchant banking experience is also due by 2 January 2027.
What happens if you work without registration
Penalty under the SEBI Act
Acting as a merchant banker without a certificate breaches section 12(1) of the SEBI Act. Section 15HB allows a penalty of up to ₹1 crore for such a contravention.
Action on registered firms
A firm that misses the capital, staffing or certification limits can face SEBI inspection, directions, suspension or cancellation of its certificate.
Lost mandates
Issuers check the certificate before appointing a lead manager. A lapse or a pending application can cost you the deal.
Capital and revenue thresholds at a glance
These are the figures reported from SEBI’s January 2026 circular. They apply in full by 2 January 2028 for existing firms. We check every figure against the notified text before we file for you.
| Item | Category I | Category II |
|---|---|---|
| Capital adequacy (net worth) | ₹25 crore moving to ₹50 crore | ₹7.5 crore moving to ₹10 crore |
| Liquid net worth | ₹6.25 crore moving to ₹12.5 crore | ₹1.875 crore moving to ₹2.5 crore |
| Core-activity revenue, 3-year cumulative | ₹25 crore (from FY 2028-29) | ₹5 crore (from FY 2028-29) |
Liquid net worth counts cash, deposits, government securities, mutual fund units and listed shares after haircuts: 10% on government securities and 30% on Nifty 500 stocks. Underwriting is capped at 20 times liquid net worth.
Frequently asked questions
Who needs merchant banker registration?
Any company that wants to manage the issue of securities as lead manager needs a SEBI certificate first. That covers public issues and rights issues. Section 12(1) of the SEBI Act, 1992 makes it compulsory. If you only advise on fundraising without managing an issue, tell us the exact work and we will confirm whether registration applies. Either way, we will map it out clearly.
What is the minimum net worth for a merchant banker?
Reported figures from the January 2026 circular are ₹50 crore for Category I and ₹10 crore for Category II by 2 January 2028, with ₹25 crore and ₹7.5 crore as the earlier steps. New applicants are expected to meet the higher requirement from the start. We check the final numbers against the regulation text before you commit capital.
What is liquid net worth?
Liquid net worth is the part of your net worth held in liquid assets, reported at about 25% of the required net worth. For Category I that is ₹12.5 crore, for Category II ₹2.5 crore. Cash, bank deposits, government securities, mutual fund units and listed shares qualify after haircuts. A CA certifies it, and we help you structure the holdings early.
What staff do we need before applying?
You need at least two qualified professionals in finance, law or business management, holding NISM Series IX certification. The compliance officer needs NISM Series III-A. The principal officer needs 5 years of merchant banking experience by 2 January 2027. We help you check each person against these tests before the application goes in.
Can we outsource due diligence or documentation?
No. Since 3 April 2026, core functions such as due diligence, documentation, pricing and allocation cannot be outsourced. They have to be done by your own team. That makes hiring and role design part of the application plan, and we include it when we prepare your staffing chart and policies.
Can a broking or NBFC group also hold the licence?
Yes, but the merchant banking business has to be ring-fenced from lending, trading and research. SEBI expects information barriers, restricted lists, surveillance of deal information and pre-clearance of staff trades. We draft the policies and walk through the structure with you, so the conflict questions are answered before SEBI asks them.
How long does SEBI take to grant the licence?
SEBI does not promise a fixed period, and the time depends on how complete the file is and how many query rounds follow. A clean application with a correct net worth certificate and a full team moves faster. We cannot promise a date, but we track every query and reply promptly.
What compliance follows after registration?
You must keep capital and liquid net worth at the required level, keep staff certifications current and respect the 20 times liquid net worth underwriting cap, certified by a CA twice a year. Revenue tests start from FY 2028-29. We set up a calendar for these, so nothing lapses quietly.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
Government fees are the ones SEBI prescribes in the regulations at the time of filing. We list them in your quote.
Ready to begin?
Tell us your group structure and we will tell you whether a merchant banker licence is within reach and what to fix first.