Corporate action order charges at Zerodha

Overview

Corporate actions are events initiated by a listed company that affect its outstanding securities. When a corporate action requires or allows shareholders to submit orders (such as subscribing to a rights issue, tendering shares in a buyback, or applying for an Offer for Sale), the broker may place these orders on the client’s behalf. At Zerodha, corporate action orders placed through the broker’s platform carry a charge of Rs 20 per order plus 18 percent GST (total Rs 23.60 per order).

This charge is distinct from the brokerage on regular secondary market trades. Corporate action orders typically go through exchange-managed tender offer platforms or the registrar’s systems rather than the normal order book. The Rs 20 charge reflects the additional administrative work of submitting, confirming, and reconciling corporate action orders for each client.

Types of corporate actions requiring orders

Rights issue subscription

When a listed company issues new shares to existing shareholders at a price below the market price (rights issue), shareholders receive rights entitlements in proportion to their holdings. Shareholders who wish to exercise their rights (subscribe to additional shares) must submit a rights subscription order through their broker or the RTA’s (Registrar and Transfer Agent’s) online portal.

Zerodha charges Rs 20 plus GST for submitting a rights subscription order on the exchange’s rights issue platform. This is separate from the cost of the shares themselves (which is debited from the client’s trading account at the rights price x quantity subscribed).

Buyback tender offer

Listed companies that wish to repurchase their own shares from existing shareholders do so through buyback programmes. SEBI regulations provide for two methods: open market buyback (through the normal stock exchange mechanism, no corporate action order needed) and tender offer buyback. In a tender offer buyback, shareholders wishing to participate must tender their shares through their broker within the offer period.

Zerodha charges Rs 20 plus GST for submitting a buyback tender order. The client’s shares are debited from the demat account (a DP charge may also apply for the debit), and if accepted, the buyback consideration is credited to the trading account. Shares not accepted in the tender offer are returned to the demat account.

Offer for Sale (OFS)

An Offer for Sale is a mechanism by which promoters or large shareholders of a listed company sell their shares to the public through the stock exchange. Retail investors can apply for OFS shares at the floor price or at a bid price above the floor. OFS applications submitted through Zerodha carry the Rs 20 corporate action order charge per order.

Delisting offer

When a company makes a delisting offer, existing shareholders can tender their shares to the acquirer (usually the promoter group) at the discovered delisting price. Zerodha charges Rs 20 plus GST for submitting a delisting tender order.

FPO and QIP applications

Follow-on Public Offers (FPOs) and Qualified Institutional Placements (QIPs) that have a retail tranche may allow existing retail shareholders to apply. These are less common and may carry similar corporate action order charges.

Charge structure

The charge is per submitted order, not per accepted order. If a client submits an OFS bid that is not allotted, the Rs 23.60 is still charged for the order submission.

Process for corporate action orders at Zerodha

Zerodha provides a corporate actions section on the Kite platform and Zerodha Console where clients can view upcoming corporate action events for stocks they hold. The typical process is:

1. Notification: Zerodha sends email and app notifications to eligible clients when a corporate action is announced (rights issue, buyback, OFS).
2. Application window: The client navigates to the corporate actions section and enters the quantity and price (if price-discovery applies, as in OFS).
3. Order submission: Zerodha submits the order to the exchange platform or registrar system. Rs 20 + GST is debited.
4. Funds block: For rights subscriptions and OFS applications, the application amount may be blocked from the client’s ledger or bank account until allotment.
5. Allotment or rejection: Results are published by the registrar. Allotted shares are credited to the demat account; funds for unallotted applications are released.

Interaction with other charges

DP charges on buyback tender

When shares are tendered in a buyback or delisting offer, the demat debit of shares triggers a DP charge of Rs 15.93 per ISIN (Rs 13.50 + GST). This is in addition to the Rs 23.60 corporate action order charge.

STT on buyback proceeds

Shares sold in a tender offer buyback at the exchange tender platform are subject to STT at the applicable rate (0.1 percent of the tender price for delivery shares). This is computed on the acceptance consideration, not the number of shares tendered (only accepted shares trigger STT).

No brokerage on rights subscription shares when sold

If a client receives shares through a rights issue and later sells them in the secondary market, the sale is a normal delivery sell transaction with zero brokerage (and applicable STT, DP charges, etc.). The Rs 20 corporate action charge only applies to the initial subscription order, not to subsequent secondary market transactions.

Corporate action orders outside Zerodha’s platform

For corporate actions where the company’s registrar (such as KFintech, Bigshare, or Linkintime) provides a direct application portal, clients can apply directly without going through their broker. In such cases, no Zerodha corporate action charge applies because Zerodha is not placing the order. The client bears any charges levied by the registrar’s portal directly (often zero for individual investors).

Exchange-based corporate action platforms (SEBI mandated the use of the exchange bidding platform for tender offer buybacks from 2018) require broker intermediation, making the Zerodha charge applicable.

Regulatory framework

SEBI governs corporate actions through multiple regulations:

• SEBI (Buy-Back of Securities) Regulations 2018 – tender offer buyback mechanism
• SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018 – rights issues
• SEBI guidelines on Offer for Sale of Shares through Stock Exchange Mechanism – OFS framework
• SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011 – delisting and open offers

Comparison with other brokers

Most discount brokers charge for corporate action order placement:

The Rs 20 per order is standard across flat-fee discount brokers, reflecting the administrative cost of the exchange tender platform process.

See also

• Zerodha brokerage structure overview
• DP charges on Zerodha
• STT and CTT on Zerodha
• Equity delivery brokerage
• GST on broking charges
• SEBI
• Zerodha
• National Stock Exchange
• Bombay Stock Exchange

References

1. SEBI (Buy-Back of Securities) Regulations 2018, Regulation 9 (tender offer through stock exchange mechanism)
2. SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018 – Chapter IV (rights issue)
3. SEBI Circular on Offer for Sale of Shares through Stock Exchange Mechanism – SEBI/HO/CFD/CMD/CIR/P/2016/67
4. SEBI (Delisting of Equity Shares) Regulations 2021
5. Zerodha Charges page, support.zerodha.com/category/charges (accessed May 2026)
6. NSE/BSE Exchange Bidding Platform for corporate actions – operational guidelines