Online Stock Broker Groww Sees Profit Soar 4X, 2X Revenue in FY24

Groww Invest Tech, which owns online stock broking giant Groww, reported a 4X year-on-year (YoY) increase in net profit to INR 297.8 Cr in the fiscal year ending March 2024 (FY24), according to data shared with credit rating agency ICRA.

In comparison, the company reported a profit after tax (PAT) of INR 73.1 crore in the fiscal year 2022-23.

According to an ICRA report, Groww Invest Tech, formerly Nextbillion Technology Private Ltd, increased its operational revenue by 123% to INR 2,899 Cr in the fiscal year under review, up from INR 1,294 Cr the previous year.

Related: Groww Receives RBI’s Green Light as Payment Aggregator

The credit agency attributed the revenue increase to the unicorn’s expanding client base and increased brokerage volumes. According to NSE data, Groww had the highest number of NSE active clients as of August 2024, accounting for over 25% of the market.

It also stated that, despite the company’s recent entry into the margin trading facility (MTF) market, which “will result in increased reliance on borrowings,” financial leverage is likely to remain acceptable.

“The company reported a return on net worth (RoNW) of 40.3% in FY24, despite paying sizeable fees for the software, server and technology services availed from the parent,” according to ICRA.

Groww Invest Tech is a subsidiary of Billionbrains Garage Ventures, which also operates Neobillion Fintech, Groww Asset Management, Groww Pay Services, Groww Insurance Broking, and Billionblock Finserv in India.

However, ICRA warned that the fintech unicorn was “vulnerable to intense competition, regulatory changes, and/or technological risks.” It also stated that the Securities and Exchange Board of India’s (SEBI) new directives on standard fee structures for market infrastructure institutions (MIIs) will most certainly have an impact on the profitability of the whole broking business, particularly bargain brokers like Groww.

“However, the elevated cost-to-income ratio continues to limit GIT’s independent profitability. The software, server, and technology services provided by BGV account for a sizable amount of operating expenses, according to the report.

Groww, founded in 2017 by Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal, is an online discount broking platform that allows users to invest in equities, exchange-traded funds (ETFs), and initial public offerings.

The fintech unicorn has attracted over $393 million in funding to date, with investors including Peak XV Partners, Tiger Global, and Propel Venture Partners.

The news comes shortly after Groww relocated its headquarters to India in March of this year. As part of this process, the company combined its US-based holding company, Groww Inc, with its Indian parent company, Billionbrains Garage Ventures.

Groww’s parent company, Billionbrains Garage, made a net profit of INR 448.7 crore in FY23, up from a net loss of INR 239 crore in the previous year. Meanwhile, operating revenue more than tripled to INR 1,277.8 crore in the fiscal year ending March 2023, compared to INR 351 crore in FY22.