Groww dethrones Zerodha as India's top brokerage in active investors
Groww has surpassed Zerodha as India's top brokerage in terms of active investors. Data from the National Stock Exchange (NSE) reveals that Groww boasts 66.3 lakh active investors, while Zerodha has 64.8 lakh as of September 2023. This marks a major shift from March 2021 when Zerodha had 34 lakh customers and Groww had a mere 7.8 lakh. While Zerodha's user base has doubled since then, Groww's customer base has skyrocketed by 750%.
Venture capital-backed platforms attracting users with zero fees
Platforms like Groww and Upstox have become popular due to their zero account opening and annual maintenance fees. This has drawn in strong competitors like HDFC Bank, which launched the Sky discount broking app. PhonePe, with over 2,000 lakh active payment customers, has also stepped into the investment space with its Share.Market platform. As of September, there were roughly 12.97 crore demat accounts in India, with only 3.34 crore Indians actively trading at least once a year on the exchange.
Zerodha's revenue still dominates despite lower user growth
Although Groww has more active investors than Zerodha, its revenue is over five times lower. In FY23, Zerodha reported a 39% growth in revenue at Rs. 6,875 crore compared to the previous financial year and an identical growth in profits at Rs. 2,907 crore. On the other hand, Nextbillion Technology Private Limited, which operates Groww, recorded a revenue of Rs. 1,294 crore in FY23 and a net profit of Rs. 73 crore.
Futures & options trading contributes to Zerodha's higher revenue
The huge revenue gap between Zerodha and Groww is mainly due to Zerodha's stronghold in the Futures & Options trading segment, a highly profitable area. Groww initially focused on drawing in new customers with long-term investment products and mutual funds, particularly systematic investment plans (SIPs), before transitioning to direct equity investment on its broking platform. However, the company is now working to attract daily and F&O traders as well.
