At this moment, Groww, India’s largest retail brokerage firm is on the cusp of accomplishing something historic. It would be the first Indian startup to list after having shifted its incorporation from Delaware back to India. The company is in the process of rapidly and dramatically expanding its user base and services. More recently, it has garnered headlines for its exceptional economic development performance metrics and backing from high-profile investors like Microsoft CEO Satya Nadella.
Founded in 2016, Groww has quickly become one of the strongest players in the Indian investment ecosystem. As of June 2023, it was clocking about 17 million active systematic investment plans (SIPs). In year-end 2020, there were 9 million distinct mutual fund investors. The firm just recently passed the 100 million cumulative downloads mark! Now, it has turned into the only investment app in India to achieve this phenomenal milestone.
First and foremost, Groww made a strategic decision more than a year ago to build its operational capabilities. This step was a lucrative grab into the rapidly growing Indian market. This shift was no easy feat. It involved huge financial investments, including the approximately $159 million in taxes that were part of their move to relocate. The move highlights Groww’s long-term ambition of further entrenching its position in India, where it has experienced significant growth.
In the fiscal year ended March 31, Groww reached a total income of ₹40.6 billion, roughly $462 million. This great number represents an amazing 45% growth year-on-year. The company has reported a consolidated profit after tax of ₹18.2 billion, or about $208 million. This subsidized success is a stunning reversal from the last fiscal year, when it posted a net deficit of nearly ₹8 billion, or $92 million. Nevertheless, this strong financial performance further illustrates Groww’s efficient business model and its exceptional customer acquisition efficiency.
The expected initial public offering (IPO) of this new tide is poised to make for an unprecedented exit opportunity. It is an eagerly awaited event for global venture funds which invested in Groww. Further, the company’s founders—Lalit Keshre/Harsh Jain/Neeraj Singh/Ishan Bansal—are retaining nearly 100% of their equity. This is indicative of their huge belief in Groww’s potential. Current stockholders intend to sell approximately 394 million shares. This would only account for ~9.4% of Groww’s total equity base. The selling shareholders consist of all the founders, who will be selling approximately 4,000,000 of the shares. This value represents only about 0.7% of the total offer for sale value.
Groww is now preparing for that by aiming to raise ₹10.6 billion (about $121 million) in new funding. Current shareholders will sell 574 million shares as part of this process. This strategic move is anticipated to greatly bolster the company’s financial position and allow it to accelerate its growth initiatives.
As of June 2023, Groww had already opened an estimated 37.4 million successful individual demat accounts. This remarkable feat contributes to over 19% of India’s market share of this segment. This massive number is an indication that Indian retail investors are taking a greater interest in equity based investments. As such, Groww now finds itself firmly at the forefront of this trend.
