But as the company steps into the public markets, it faces both an opportunity and a test: can it stay on the scorching growth path it has traversed so far?
Groww, the right startup at the right time
Groww was founded in 2017 by four ex-Flipkart employees — Lalit Keshre, Harsh Jain, Ishan Bansal, and Neeraj Singh — who shared a simple but powerful vision: to make investing as easy as shopping online. “A direct-to-customer model. The way people come to Amazon, choose products, research, and buy. Make everything [financial products] available,” Keshre told The Economic Times.
The timing couldn’t have been better. India was undergoing a digital transformation. Aadhaar and e-KYC made financial onboarding instant and remote. The launch of Reliance Jio in late 2016 had made data access nearly free, and digital literacy was rising rapidly, even in smaller towns.
These factors, coupled with the pandemic-driven digital acceleration of 2020–2021, created the perfect storm for platforms like Groww to scale swiftly.
Groww began by offering direct mutual funds through an easy-to-use app. Its simple design, transparent pricing and absence of jargon made it particularly appealing to first-time investors. As users grew more confident, the platform expanded into stockbroking, derivatives, commodities and margin trading, evolving into a one-stop shop for retail investing. This “Amazonisation” of investment propelled Groww to the top of the sector.Also Read | Lenskart vs Groww: Which IPO should investors bet on amid valuation chatter and divided opinions?
From a startup to a market leader
The pace of Groww’s rise has been staggering even by startup standards. Founded in 2017, it became a unicorn in 2021, with its valuation tripling to $3 billion the same year. Just four months before its IPO, Groww’s last funding round valued it at $7 billion, and the company could now command nearly $8 billion at listing.
Its operational expansion has been equally impressive. Groww has users across more than 98% of India’s pin codes, and 81% of its active customers come from outside the top six cities, a testament to deepening retail financial inclusion. Nearly a quarter of its user base is women, signaling a broader social shift in financial participation.
Financially, Groww’s performance has been robust. Its revenue more than doubled in three years to Rs 4,056 crore in FY25, while profit stood at Rs 1,819 crore, translating into a net margin of 45%. The company has been consistently profitable for five years, barring a one-time redomiciling tax expense in FY24 that resulted in an accounting loss of Rs 805 crore.
The Indian market itself has been a strong tailwind. Since Groww’s inception, the BSE Sensex has tripled from 25,000 to 85,000, and the number of demat accounts has surged 10x to 20 crore, roughly one-fifth of India’s adult population. Monthly SIP inflows have quadrupled to Rs 30,000 crore over six years. Groww emerged at the perfect moment and rode this structural shift to scale rapidly.
Leadership at a premium
Groww commands the highest number of active demat accounts in India. “Groww is an interesting company. It is the market leader with the highest number of active demat account holders at 26%. The same for the next broker is close to 16%,” Arun Kejriwal, founder of Kejriwal Research and Investment Services, told The Economic Times.
Groww has 1.25 crore active demat accounts, ahead of Zerodha (75 lakh) and Angel One (73 lakh). The IPO’s price-to-earnings multiple of around 40x is higher than peers such as 5Paisa, Motilal Oswal Financial Services, Nuvama Wealth Management and Angel One, which trade between 20x and 30x. Analysts say the premium reflects both Groww’s rapid growth — about 85% annually — and its industry-leading margins.
The Rs 6,632 crore IPO is a mix of fresh issue and offer for sale. Of the Rs 1,060 crore being raised through the fresh issue, Groww plans to invest in cloud infrastructure, its NBFC arm GCS, margin trading facilities, brand building and acquisitions. “In the next three to four years, the share of incremental revenue growth will come from MTF, commodities and wealth management businesses,” Harsh Jain, co-founder and COO, told The Economic Times.
Groww’s growth challenges
Yet, just as Groww steps into the public markets, the winds of regulation are shifting — and could turn into headwinds. India’s Securities and Exchange Board (Sebi) has tightened rules around futures and options (F&O) trading, the key growth driver for discount brokers.
The new rules, implemented on October 1, 2024, raised the minimum lot size for derivatives from Rs 5–10 lakh to Rs 15–20 lakh, weighing on trading volumes across the industry. For Groww, broking services contributed 80% of revenues in Q1 FY26, down from 85% in FY25, while the derivatives share fell sharply from 90% of broking revenue in FY24 to 50%.
Nitin Jain of Bonanza told The Economic Times that the IPO is being launched “under significant regulatory uncertainty,” with much of the sector’s growth having been powered by F&O volumes now under scrutiny. Groww’s brokerage revenue fell 18% year-on-year in the June quarter, while overall sales dipped 10%, with profit flattered by one-time items. “When adjusted for these, profit actually declined by 25%,” he noted. Nearly 62% of Groww’s broking revenue still comes from derivatives, leaving it vulnerable to any further F&O restrictions. Jain estimated that even a 5% drop in F&O orders could reduce Groww’s revenue and profit by up to 4.8%.
The impact is visible across the sector. Angel One saw a 50% year-on-year decline in profit to Rs 2,120 crore in the September quarter, while Zerodha reported a 40% slide in brokerage revenues. Zerodha’s founder Nithin Kamath wrote in a blog that the company may need to rethink its free delivery trading model if regulations tighten further.
What will fuel future growth?
Despite these headwinds, Groww is proactively diversifying. It is building a broader financial ecosystem that goes beyond broking. The company has expanded into mutual funds, lending, and digital payments (Groww Pay). In October 2025, it acquired wealth-tech firm Fisdom for $150 million to strengthen its high-net-worth (HNI) offerings through a new platform called “W”. Fisdom’s banking partnerships are expected to help Groww deepen its wealth management and advisory services.
“Capital market-facing businesses face regulatory risk. But in the case of Groww, it is diversifying from broking, which is a good sign,” Geetanjali Kedia of SP Tulsian Investment Advisor told The Economic Times. She added that the company’s valuation, with a PE of 33x, is only slightly above its peers and “justified for Groww’s growth.”
Analysts broadly agree that while near-term challenges persist, Groww’s fundamentals remain strong. Anand Rathi Research described Groww as “a compelling long-term bet,” noting that “while valuations appear stretched in the near term, Groww’s strong fundamentals and customer stickiness make it a compelling long-term bet.” The brokerage has given a “Subscribe – Long Term” rating to the IPO, citing India’s low broking penetration (only about 5% of adults have active accounts) as a major driver of future growth.
A market leader under watch
Groww’s story so far has been one of perfect timing, technological excellence, and relentless execution. From four small-town founders envisioning a simpler way to invest, to becoming India’s leading retail investment platform with users in nearly every corner of the country, Groww has mirrored India’s financial evolution.
The IPO is not just a financial milestone but a strategic turning point. The company must now navigate regulatory uncertainty and find new engines of growth beyond F&O trading. Yet its brand strength, customer base, and adaptability give it a solid foundation.
As Nitin Jain aptly told The Economic Times, “The broking industry’s high-growth era is giving way to a phase of adjustment. Regulatory clarity will be key to how investors value these platforms going forward.” For Groww, the road ahead may be challenging, but it is equally rich with potential. The same vision and agility that powered its rise could now define its next chapter as a public company.