Stock broking platform Groww has decided to discontinue its US stocks offering from next month due to ‘certain complications’, which the startup said, hinder the customer experience it stands for.
In emails sent to its users who invest in US stocks through the platform, Groww said they would not be able to buy US stocks and add funds to their USD wallet starting February 27, 2024.
Further, users won’t be able to sell these stocks and withdraw balance from their USD wallet post March 31, 2024. However, sources told Inc42 that the startup plans to extend this deadline till June 30, 2024.
Inc42 has accessed the email sent by the investech platform to its users. A questionnaire sent to Groww on the development didn’t elicit any response till the time of publishing this story.
In the email, Groww said that certain complications, such as adding USD funds, high withdrawal fee, frequent downtimes, and delays in money settlement, have arisen in the ecosystem since it launched the facility for its users to invest in US stocks.
“These factors are unfortunately beyond our control… and hinder the customer experience that Groww stands for,” the startup said.
The sources said that Groww stopped offering US stocks investment facility to new users around a year ago and its latest move would only impact a small fraction of its user base. They said that only around 2,000 users invest in US stocks through the platform.
“Investing in the US market is broken due to two key reasons. Due to taxation, users can’t invest their full amount in US stocks…Further, stock allocation and settlement is also a lengthier process,” one of the sources said.
They said that the users who have invested in US stocks would have the option to liquidate their holdings before June 30, 2024 or transfer it to any other broker which provides this facility.
Founded in 2017 by Harsh Jain, Lalit Keshre, Neeraj Singh, and Ishan Bansal, Groww offers stock broking and mutual fund investment services. Groww’s competitors Upstox and Zerodha also don’t allow users to invest in the US stock market directly as of now.
In October last year, Groww surpassed Zerodha to become the brokerage with the highest number of active user base. It had a total of 6.63 Mn active investors at the end of September 2023.
Meanwhile, Groww also entered the asset management space last year after the acquisition of the mutual fund business of Indiabulls Housing Finance for INR 175.6 Cr. Later, the startup also received the approval from the Securities and Exchange Board of India (SEBI) to launch its first index fund.
Currently, Groww Mutual Fund’s new fund offer, Groww Banking & Financial Service Fund, is open for subscription till January 31.
Now, Groww is also looking to turn into a fintech platform. After entering the lending vertical in 2022, the investech platform entered the payments vertical last year.
Amid all these, Billionbrains Garage Private Limited, the parent entity of Groww, turned profitable in FY23, posting a profit of INR 448.7 Cr against a net loss of INR 239 Cr in FY22. Operating revenue surged to INR 1,277.8 Cr in FY23 from INR 351 Cr in the previous year.
The post Groww To Discontinue US Stocks Offering Due To ‘Complications’ appeared first on Inc42 Media.
