Groww, the discount brokerage platform managed by Nextbillion Technology Private Limited, has achieved a significant milestone by surpassing Zerodha to become the largest brokerage in India based on the number of active investors, according to data released by the National Stock Exchange (NSE). As of the end of September, Groww boasts 6.63 million active investors, while Zerodha has 6.48 million. This marks a noteworthy shift, with Groww’s active user base of retail investors growing by nearly 7% in September, compared to Zerodha’s 1.25% month-on-month growth.
Out of India’s total active investor base of 32.56 million, Groww now commands a 20.35% share, while Zerodha holds 19.9%. Other brokerages, such as Angel One, Upstox, ICICI Securities, and HDFC Securities, follow in the rankings.
Despite Groww’s ascent in terms of user numbers, Zerodha continues to lead in revenue and profit. In the fiscal year 2023, Zerodha reported a revenue of Rs 6,875 crore, a 39% increase from the previous fiscal year, with profits also showing identical growth at Rs 2,907 crore.
In contrast, Groww reported revenue of Rs 1,294 crore, which, while significantly less than Zerodha’s numbers, marked a remarkable 252% increase from the previous financial year when it recorded Rs 367 crore, as per information shared with credit rating agency ICRA. Groww’s net profit surged from Rs 6.8 crore to Rs 73 crore, with almost 90% of its revenue coming from retail broking.
“NBT has, under the brand ‘Groww,’ emerged as one of the leading discount brokers in India as it made substantial client additions during FY2022-FY2023 amid industry tailwinds and record retail investor participation, especially in FY2022,” the report added.
One of the key factors driving Groww’s rapid user base expansion, despite a general decline in demat account openings in the country over the last 18 months, is the platform’s fee structure and its substantial marketing investments. While Zerodha charges for demat account opening and maintenance, Groww does not, making it more attractive to customers.
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Additionally, Groww is diversifying its revenue streams by entering UPI payments and credit products. According to ICRA, the company backed by Tiger Global and Peak XV Partners is also considering venturing into the margin trading funding (MTF) business, allowing customers to buy stocks worth more than they can pay upfront by loaning them the money and charging interest on top. The report emphasized that Groww’s ability to sustain its momentum in client additions while improving its revenues and profitability and maintaining robust capitalization remains critical from a credit perspective.
