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Updated January 26th, 2024 at 12:37 IST

Zerodha vs Groww: A fierce battle for brokerage dominance

About 4.2 million new demat accounts were opened in December 2023.

Business Desk
Zerodha Vs Groww
Zerodha Vs Groww | Image:Republic
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Zerodha vs Groww: The stock brokerage industry has gone through a massive phase of disruption in the aftermath of the pandemic. During the pandemic, when people were forced to stay indoors to curb the spread of Covid-19 pandemic, stock trading activity and number of demat accounts surged and the primary beneficiaries of this change in attitude towards financialisation of savings were discount brokerage firms like Groww and Zerodha.

Discount brokerage firms like Groww and Zerodha disrupted stock broking industry by providing easy and transparent access to trading applications at very low brokerage.

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About 4.2 million new demat accounts were opened in December 2023. Meanwhile, the systematic investment plan (SIP) figure saw an inflow of Rs 17,610 crore during the same month, AMFI data revealed.

Zerodha, the brainchild of entrepreneurial duo Nithin Kamath and Nikhil Kamath, commenced its journey in 2010 with a vision to democratise stock trading. 

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With its state-of-the-art technology and commitment to low brokerage fees, Zerodha swiftly emerged as the undisputed leader in the online trading landscape. The firm's recently disclosed financial performance for the fiscal year 2022-23 stands as a testament to its enduring success. 

Boasting a remarkable 38.5 per cent surge in revenue, totalling Rs 6,875 crore, compared to the preceding financial year, Zerodha further flaunts a staggering 39 percent growth in profits, culminating at Rs 2,907 crore in FY23. 

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Such formidable figures solidify Zerodha's position as the largest retail broking firm in India, boasting an active client base of approximately 64 lakh as of August.

However, Zerodha's dominance faces a formidable challenger in the form of Groww, a rising star in the fintech arena. 

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Founded in 2017 by four former Flipkart employees, Lalit Keshre, Harsh Jain, Ishan Bansal, and Neeraj Singh, Groww swiftly captured the attention of investors with its intuitive platform and emphasis on long-term investments. ‘

Despite trailing behind Zerodha in revenue, Groww showcased remarkable growth, with FY23 revenues surging to Rs 1,294 crore, marking a substantial three-fold increase from the previous fiscal year. 

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The firm's net profit for FY23 surged to Rs 73 crore, a notable leap from Rs 6.8 crore in the preceding fiscal. Moreover, Groww's active client base witnessed a commendable rise from approximately 40 lakh to 60 lakh, positioning the firm as a formidable contender in the brokerage arena.

While Zerodha's financial prowess remains unparalleled, Groww's strategic manoeuvres and exponential growth trajectory pose a formidable challenge to its dominance. 

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Despite Zerodha's commendable profitability and market leadership, concerns loom regarding stagnation in its active client base and the looming threat of Groww's impending ascendancy. Groww's innovative approach, underscored by its venture capital backing and relentless focus on customer acquisition, underscores its potential to disrupt the established order.

As the battle for market supremacy intensifies, investors and industry observers keenly monitor the unfolding dynamics between Zerodha and Groww. 

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While Zerodha's financial might and market leadership command respect, Groww's disruptive potential and relentless pursuit of innovation herald a new era in India's brokerage landscape. In this fiercely contested arena, only time will unveil the ultimate victor in the Zerodha vs. Groww saga.

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Published January 26th, 2024 at 12:30 IST

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