Trading platform Groww now boasts over 1 crore active users
What's the story
Groww, a prominent financial services firm, has solidified its position as a leader in the online discount broking market.
According to NSE data, the company's active user base exceeded 1.03 crore in May, outpacing its closest competitor Zerodha, which reported 75 lakh users.
This growth is attributed to the addition of nearly 4.33 lakh active users by Groww in May, while Zerodha saw an increase of around 1.14 lakh.
Competition
Market share and user base of other players
The surge in active users has likely propelled Groww's market share beyond 27%. Other players in the market also experienced growth in their user base.
Angel One added 1.84 lakh users in May, bringing its total count to 64.86 lakh.
Upstox reported an active user base of 25.91 lakh, while Paytm Money had 7.86 lakh active users.
These figures underscore the fierce competition within the online discount broking sector.
Disruption
Online discount brokers disrupt traditional market
Online discount brokers like Zerodha, Groww, and Upstox have significantly disrupted the market by charging minimal flat transaction fees for stocks bought on their platform.
This business model has enabled them to capture a substantial market share from traditional brokerages and bank-led broking institutions over the past decade.
In May 2024, ICICI Securities recorded an active user base of 18.7 lakh, while Kotak Securities and HDFC Securities reported user bases of 12.82 lakh and 11.31 lakh, respectively.
Market dominance
Groww's dominance and market share
Groww has established a significant lead over its Bengaluru-based rival, Zerodha, since September 2023.
In April 2024, Groww commanded nearly a quarter of active investors on the NSE, with its active investor base reaching 99 lakh, up 77.5% from a year ago.
This growth propelled its market share to 23.4%, up from 16.5% in the previous year.
Despite this, Zerodha's focus on the trading community could potentially make it the largest company in terms of revenue and profit.
Insights
Financial performance and future outlook
In FY23, Zerodha reported a 38.5% increase in revenue at ₹6,875 crore in the previous financial year. It also saw a 39% rise in profit at ₹2,907 crore in FY23.
On the other hand, Groww reported a profit after tax of ₹448 crore, primarily due to its higher operating revenue, which surged 266% on-year to ₹1,277 crore.
Both companies are privately-held and their FY24 numbers will be shared with RoC later this year.