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Investor's Choice, Groww Surpasses Zerodha in India's Brokerage Battle

India's Evolving Financial Market, The Fascinating Story of Groww's Triumph

12 October 2023


Kunal Tyagi

India produced 3X more unicorns than China in 2022.png
  • Groww has become India's leading brokerage, surpassing Zerodha with 6.63 million active investors in September 2023.

  • Despite Zerodha's higher revenue, Groww's user base has grown remarkably from 0.78 million users in FY21 to 5.78 million in FY23.

  • Zerodha's dominance in Futures and options (F&O) trading contributes to its revenue lead, while Groww aims to attract daily and F&O traders alongside long-term investors.

In the fast-paced world of finance, India has witnessed a significant shift as fintech startup Groww outshines the prominent Zerodha to become the country's top brokerage in terms of active investors. According to recent data from the National Stock Exchange (NSE), as of September 2023, Groww boasted an impressive 6.63 million active investors, while Zerodha trailed behind with 6.48 million.

Groww, founded in 2014 and owned by Nextbillion Technology Private Ltd, offers a diverse range of financial services, including investment management, tax preparation, and mutual funds. This achievement underscores Groww's commitment to providing a user-friendly and comprehensive platform for Indian investors.

Interestingly, newcomer Upstox secured the fourth position with 2.19 million active investors, while Angel One ranked third with 4.86 million active investors. Upstox, founded in 2009 by RKSV Securities India Private Ltd, offers investment advisory services alongside stock trading, mutual funds, and IPOs. Meanwhile, ICICI Securities claimed the fifth spot with 1.91 million clients.

Notably, Groww's growth trajectory has been remarkable, surging from approximately 0.78 million users in FY21 to 5.78 million investors in FY23. In the same period, Zerodha's user base grew more steadily, doubling from 3.4 million in March 2021 to 6.39 million by the end of FY23.

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The financial landscape in India paints an intriguing picture, with 12.97 crore demat accounts registered by the end of September. However, NSE data indicates that only 3.34 crore Indians actively engage in trading on the exchange at least once a year. This dichotomy emphasizes the significance of attracting and retaining investors in this dynamic market.

When comparing user growth to revenue, Zerodha clearly emerges as the leader. In FY23, the company reported a 39% growth in revenue, reaching Rs 6,875 crore, along with a net profit of Rs 2,907 crore. In stark contrast, Nextbillion Technology Private Limited, the parent company of Groww, recorded revenue of Rs 1,294 crore in FY23, signaling substantial growth from the Rs 367 crore reported in FY22, accompanied by a net profit of Rs 73 crore.

This substantial revenue gap can be attributed to Zerodha's stronghold in the Futures & Options (F&O) trading, an exceptionally profitable segment. Groww, initially focusing on attracting long-term investors with mutual funds and systematic investment plans, has now expanded to include direct equity investment on its broking platform. The company is also working to attract daily and F&O traders.

Zerodha's CEO, Nithin Kamath, has cautioned against overly optimistic valuations, comparing them to unrealistic expectations in a relationship. He emphasized the importance of setting realistic expectations with customers, stating, "Trading the markets is a serious business with serious risks involved." Kamath also noted that while there's still significant interest in the markets, Zerodha has experienced a plateau in terms of revenue and profitability in the current financial year.

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