Groww Surpassed Zerodha to Become No.1 Stock Broker

In the realm of active investors, Bangalore-based fintech startup Groww Surpassed Zerodha to Become No.1 Stock Broker. According to NSE data, by the end of September 2023, Grow boasted 6.63 million active investors, while Zerodha had 6.48 million. Back in March 2021, Zerodha had 3.4 million customers, compared to Grow’s 0.78 million.

Groww Surpassed Zerodha to Become No.1 Stock Broker

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NSE defines an active investor as one who conducts at least one trade in a year. While this number doesn’t necessarily signify a brokering platform’s popularity, it certainly demonstrates rapid growth, especially for a P2P lending-backed startup that entered stock brokering in 2020. Zerodha was leading in this race since 2019. Zerodha took almost a decade to become the frontrunner in the world of stock brokering. However, Grow managed to capture a significant customer base within just three years by aggressively utilizing its own social media channels, videos, and blogs. It also has a significant presence in television, especially in cricket and online advertising, reaching potential customers through Facebook and Google. By the end of FY23, Zerodha had 6.39 million customers, making it the country’s first and largest discount brokerage, while Grow had 5.37 million customers. Grow has witnessed significant growth, going from around 0.78 million users in the financial year 2011 to 3.85 million in the financial year 2012 and reaching 5.78 million investors in the financial year 2013. This growth has also attracted formidable competitors like HDFC Bank, which launched the Sky Discount Broking app.

HIGHLIGHTS :

• From INR 4,964 Cr in FY22 to INR 6,875 Cr in FY23, Zerodha’s total revenue climbed by 38%.

• The net profit of the stock brokerage platform increased 39% from INR 2,094.3 Cr in FY22 to INR 2,907 Cr.

• CEO Nithin Kamath stated in a blog post that the startup’s revenue and profit increased as a result of growing interest in futures and options.

Platforms like Grow and Upstox, which are venture capital-backed, have gained popularity because they do not charge fees for opening accounts or annual maintenance. PhonePe, with over 200 million active payment users, has entered the investment space with its Share.Market platform.

By the end of September, there were approximately 12.97 crore demat accounts in the country. Interestingly, NSE data reveals that only 3.34 crore Indians actively trade on an exchange at least once a year.

It’s interesting to note that Zerodha’s revenue surpasses Grow by more than five times. During FY23, Zerodha reported a revenue of 6,875 crore rupees, marking a 39% growth compared to the previous financial year. It also recorded similar growth in profits, which were 2,907 crore rupees in the previous financial year.Meanwhile, Nextbillion Technology Private Limited, the company behind Grow, reported a revenue of 1,294 crore rupees in the financial year 2013, which is more than three times its 367 crore rupees revenue in the financial year 2012. It registered a net profit of 73 crore rupees.”

Company Overview :

Prior to digging into the financial figures, it’s critical to comprehend the major players in this dynamic market:

Grow:

A finance platform with an entrepreneurial backing that has grown quickly. In the fiscal year 2013, it had an astounding 5.78 million investors, up from roughly 0.78 million users in the fiscal year 2011. Grow has established itself by attracting strong rivals such as HDFC Bank with its user-friendly and affordable investment alternatives.

Zerodha:

By the conclusion of the the year 2023, Zerodha—a well-known brand in the discount brokerage industry—had amassed over 6 million customers. The company’s considerable revenue is mostly derived from its success in the futures and options trading market.

Favourable Patterns :

Grow has become the industry leader in active investor brokerage services after achieving notable user growth. It has been successful for them to strategically target long-term investors with managed investment programmes and mutual funds. Their quick efforts at retail and acquiring customers have paid off.

Next Challenges :

Grow’s user base is amazing, but their revenue is not as strong as Zerodha’s. This is mainly because Zerodha is more prominent in attractive contracts and options trading. Grow is currently trying to draw in daily and F&O traders in an attempt to close this gap.