India’s largest stock broking firm growwho competes with the Kamath brothers Zerodhahas more than doubled its revenue from Rs 1,295 crore in FY23 to Rs 2,900 crore in FY24, according to data from rating agency ICRA.
The company also reported that its net profit quadrupled from Rs 73 million in the previous fiscal year to Rs 298 million.
These results represent the independent performance of Groww Invest-Tech Private Limited (GIT), which operates Groww’s stockbroking business.
Increase in retail intermediation activities
The revenue increase is largely attributed to the increase in retail brokerage activities, which accounted for 90% of the company’s operating income. The company offers stock broking services in both cash and derivatives markets, along with mutual fund distribution, through its subsidiary, Groww Invest-Tech Private Limited.
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Market share and active users
Groww has solidified its position as a leader in the Indian stock broking industry. According to data from the National Stock Exchange (NSE), as of August 2024, the platform had 1.2 crore active users and controlled 25% of the Indian market.
In October 2023, Groww surpassed Zerodha to become the largest stock brokerage app in India. Other major competitors include AngelOne, Upstox and ICICI Securities, all of which continue to compete for share in the rapidly expanding market.
While Groww leads in terms of user base, Zerodha is still far ahead in financial performance. Zerodha posted revenue of Rs 8.32 billion and net profit of Rs 4.7 billion for FY24, surpassing venture capital-funded Groww.
Margin Trading System Entry (MTF)
Groww recently entered the Margin Trading Facility (MTF) business, which allows investors to borrow funds to increase their market exposure. The move is expected to increase the company’s borrowings, which will be funded through a combination of internal resources and commercial paper.
However, according to ICRA, Groww’s financial leverage is expected to remain manageable despite higher debt requirements.
While Groww’s growth trajectory has been notable, the company faces challenges ahead. The broking industry is likely to see a reduction in revenue in the next financial year due to increased trading taxes and possible restrictions on retail futures and options trading. The regulatory changes, including possible limits on futures and options trading, are expected to affect all major brokerage firms, including Groww and Zerodha.
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