Groww, the online discount broking and investment platform, has received approval from the Securities and Exchange Board of India (SEBI) to launch its index fund called the “Groww Nifty Total Markets Index Fund.” This marks a significant step for Groww as it diversifies its offerings into the mutual fund space.
Index funds are passive mutual funds designed to track and replicate the performance of popular market indices. They provide investors with a way to gain exposure to a wide range of assets represented by these indices.
Lalit Keshre, Co-founder of Groww, announced this development on social media platform X (formerly known as Twitter), stating, “Groww Mutual Fund got approval for its first NFO – Groww Nifty Total Market Index Fund.”
Groww plans to launch this index fund through a new fund offering (NFO). An NFO is similar to an Initial Public Offering (IPO) in the stock market and is the first-time subscription offer by Asset Management companies to introduce a new category of fund. It serves to raise capital for the fund and attract investors.
This announcement comes shortly after one of Groww’s competitors in the broking space, Zerodha, revealed its plans to launch mutual fund schemes under its mutual fund business, Zerodha Asset Management Ltd. Zerodha formed a joint venture with the wealth management platform Smallcase to establish the new fund house, which will offer a mix of index funds and Exchange-Traded Funds (ETFs).
Groww’s entry into the mutual fund sector was facilitated by its acquisition of the mutual fund business of Indiabulls Housing Finance (IBHFL) for Rs 175.6 crore, a move that received regulatory approvals in May. This acquisition provided Groww with a head-start in establishing its own Asset Management Company (AMC).
Groww has seen substantial financial backing, with a total of $393 million raised thus far. In its latest funding round in October 2021, led by ICONIQ Growth, Groww achieved a valuation of $3 billion after securing $251 million.
