Thank you for offering to help out Manu. But the forum is not allowing me to upload an epub file.
BTW, in the meantime I had written to Kobo online and they said that it does not support Malayalam fonts.
Thanks again for your generous offer to test it.[DOUBLEPOST=1406102372][/DOUBLEPOST]
Thank you all for your help. Just went ahead and bought it on ebay, will have to experiment on my own and see if I can get it to work. Will post here if I succeed and anyone is interested.