Groww turns profitable, revenue zooms 266% in FY23

Financial services company Groww on Wednesday reported a profit after tax (PAT) of Rs 448 crore for the financial year ending March 2023. The surge can be attributed to the growth in its operating revenue, which jumped nearly 266 per cent year-on-year to Rs 1,277 crore in the same period.

In contrast, the previous financial year saw Groww grappling with a loss of Rs 239 crore due to a surge in expenses. During FY23, the company reported total expenses of Rs 932 crore, compared to Rs 660 crore in FY22. Meanwhile, its total income for FY23 stood at around Rs 1,427 crore.

However, Groww's broking business reported a profit of Rs 73 crore, from Rs 6.8 crore in the previous fiscal year.

The expansion of Groww's active client base to 60 lakh in the current year, from approximately 40 lakh last year, played a major role in bolstering its financial performance, ICRA said in a note on October 5, 2023.

Established in 2016 by former Flipkart executives Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal, Groww is an investment platform that offers a new way of investing money with stockbroking and direct mutual funds.

In January 2022, Groww ventured into the lending business, offering small-ticket loans to select users based on their transaction history. Additionally, the firm introduced UPI payment features on its broking app.

In 2021, shortly after achieving unicorn status, Groww's valuation tripled to $3 billion through two funding rounds, attracting investments from prominent firms like ICONIQ Growth, Ribbit Capital, and YC Continuity, among others.

Groww competes with the companies Zerodha, 5paisa.com, Kuvera, and Angel One among others in this segment.

Significantly, as of September 2023, Groww overtook Zerodha to become India's leading brokerage in terms of active investors. 

Bengaluru-based Groww boasts 6.63 million active investors, surpassing Zerodha's 6.48 million investors at the end of September 2023, according to the National Stock Exchange (NSE). To put this growth into perspective, in March 2021, Zerodha had 3.4 million customers, while Groww had 0.78 million. 

Groww’s user base increased from approximately 0.78 million users in FY21 to 3.85 million in FY22 and 5.78 million investors in FY23.

In August, PhonePe entered the stock broking business by launching, Share(dot)Market.