Groww Receives Approval from SEBI for the Launch of Nifty Non-Cyclical Consumer Index Fund

Groww - Startup Article

Three points you will get to know in this article:

  • AMC Groww Mutual Fund launching NFO in early May.
  • Fintech unicorn’s open-ended scheme benchmarked against Nifty Non-Cyclical Consumer Index.
  • Billionbrains Garage became profitable in FY23, with a net profit of INR 448.7 Cr, compared to a net loss of INR 239 Cr in FY22.

Introduction to Groww

Groww is a financial technology company that was founded in 2017 by Lalit Keshre, Harsh Jain, Ishan Bansal, and Neeraj Singh, who were former employees of Flipkart. The company focuses on simplifying the investment process for individuals in India. It started with mutual fund distribution and has since expanded its offerings to include stocks, digital gold, ETFs, intraday trading, and IPOs based on user demand. Presently, over 1.5 crore users across India trust Groww for their investment needs. In terms of funding, Groww has raised significant capital in various funding rounds, with notable investors including ICONIQ Growth, Tiger Global Management, Sequoia Capital India, Ribbit Capital, YC Continuity, Propel Venture Partners, and others. As of October 2021, Groww’s valuation stood at $3 billion following a Series E funding round.

SEBI Approval for Nifty Non-Cyclical Consumer Index Fund

Groww, a leading fintech company, has secured approval from the Securities and Exchange Board of India (SEBI) to introduce India’s inaugural Nifty non-cyclical consumer index fund.

This groundbreaking fund, spearheaded by Groww Mutual Fund, is set to make its debut in early May. According to a company announcement, it will be an accessible investment opportunity, aligned with the Nifty Non-Cyclical Consumer Index (Total Return Index).

For those unfamiliar with the concept, this index monitors the performance of the 30 largest stocks within the non-cyclical consumer sector. These encompass various industries such as consumer goods and services, telecommunications, media, and entertainment, among others.

Groww's Strategic Moves in Mutual Funds Arena

Seven months after receiving approval from the market regulator to launch its very first index fund, the fintech unicorn has unveiled a fresh development. This move opened the door for the stockbroking platform to step into the mutual fund arena last year.

In another significant move last year, Groww took over the mutual fund business of Indiabulls Housing Finance, sealing the deal at a total of INR 175.6 Cr. This acquisition laid the groundwork for Groww’s venture into the asset management company (AMC) realm.

Groww's Latest New Fund Offering (NFO)

Groww, the up-and-coming investment platform, has recently launched its latest New Fund Offering (NFO). This exciting development follows closely behind news that its rival, Zerodha, has been in discussions with multiple investors, aiming to secure up to $100 million for its asset management company, Zerodha Fund House. Notably, Groww, under the leadership of Nithin Kamath, made its mark by introducing its first three mutual fund schemes in October 2023.

Established in 2017 by former Flipkart employees Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal, Groww stands out for its online stockbroking services and direct mutual fund offerings. In a competitive landscape, it vies with industry giants such as Zerodha, ETMoney, and StockGro.

Groww's Innovative ``Super App`` Aspirations

The recent launch marks a significant step for Groww as it continues to push forward with its “Super App” aspirations, focusing on expanding its range of products. Over the past year, the company has broadened its offerings, from providing quick personal loans to enabling UPI payments, thereby enhancing its product lineup. It’s worth noting that Groww’s parent company, Billionbrains Garage, achieved profitability in the financial year 2022-23 (FY23), recording a net profit of INR 448.7 Cr compared to a substantial net loss of INR 239 Cr in the previous fiscal year. Moreover, the operating revenue soared more than threefold year-on-year (YoY) to INR 1,277.8 Cr in FY23.

In a parallel development, Groww’s introduction of a new NFO coincides with Jio Financial Services and BlackRock, the world’s largest asset manager, earmarking $300 Mn to revolutionize India’s $540 Bn mutual fund industry.

Groww, a prominent fintech company, secured SEBI’s approval to launch India’s pioneering Nifty non-cyclical consumer index fund, marking a significant milestone. This strategic move into the mutual fund space, coupled with recent acquisitions and product expansions, reflects Groww’s dynamic growth trajectory. The company’s commitment to innovation and expanding its offerings, including the recent NFO launch, underscores its competitive edge. With strong financial performance and market positioning, Groww, under the leadership of Nithin Kamath, is poised for continued success in India’s evolving fintech landscape.

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