Startup Deep Dive : Groww — India’s biggest broker by clients, not by profit

In September 2023, Groww overtook Zerodha to become India’s largest stockbroker by active clients, a lead that has since stretched to almost two-to-one. By June 2026 Groww counted 1,30,53,752 active clients on the NSE against Zerodha’s roughly 68 lakh, a 28.7% market share nobody else in the industry gets close to.

Yet in the one year that matters most to a listed company’s shareholders, Zerodha still made more money. Zerodha’s FY25 net profit came in at about ₹4,237 crore against Groww’s ₹1,824 crore, even with less than half the customer count. Groww’s size did not automatically buy it Zerodha’s profit margin, and the gap between “biggest” and “most profitable” runs through almost everything that follows: how Groww makes money, why a routine corporate restructuring cost it ₹1,340 crore in one year, and why a single regulator’s rule change can move its revenue by hundreds of crore.

Quick facts

What they do

Groww is a direct-to-consumer investing app. A first-time investor opens it to buy mutual funds, trade stocks and derivatives, apply for IPOs, park money in fixed deposits, and, more recently, borrow against their portfolio through a margin trading facility. The company’s own asset management arm, Groww Mutual Fund, now runs alongside the brokerage, so Groww both distributes other fund houses’ products and manufactures some of its own. Its customer is deliberately not the seasoned trader with a Bloomberg terminal habit; it is the college graduate or small-town salaried professional opening their first demat account on a phone, which is also why the company’s growth has tracked India’s smartphone and UPI-era financialisation rather than any one product breakthrough.

The origin

Lalit Keshre, Harsh Jain, Neeraj Singh and Ishan Bansal worked together at Flipkart — Keshre in product, having launched Flipkart Quick and helped build the Marketplace model; Jain in product management; Singh as an engineering manager who had built Flipkart’s returns and refunds system; and Bansal in corporate development, a CFA charterholder by training. In 2016 the four quit to build something in personal finance, betting that the same playbook that made e-commerce simple for first-time internet users — clean design, few steps, no jargon — was missing from investing. Their insight was specific: most Indians who did invest were sold “regular” mutual fund plans loaded with a trail commission for a distributor they rarely saw again, while “direct” plans, which strip out that commission and cost the investor less every year, were nearly impossible to buy without already knowing they existed. Groww’s original pitch was simply to make direct mutual funds visible and easy to buy from a phone.

The struggle years

The first version of that idea did not work. Groww launched in 2016 as a robo-advisory app that would algorithmically manage a user’s money, and it went nowhere: Indian retail investors were not ready to hand a savings decision to software they could not see or question, and the app struggled for any real traction. The founders scrapped it.

In May 2017 they relaunched as a plain direct mutual fund distribution platform, no advisory layer, just a cleaner way to buy what already existed. It worked, but slowly — the team had targeted 100 customers in the first month and got 600, a promising number but nowhere near the scale a venture-backed company needs to justify itself. It took until 2020 for Groww to become a SEBI-registered stockbroker and start building toward the business that would eventually define it.

The costliest setback came much later, and it was self-inflicted by the company’s own original paperwork. Like many Indian startups of its vintage, Groww had incorporated its holding company, Groww Inc., in Delaware in 2016 to raise US venture capital more easily, even though its revenue and customers stayed entirely in India. Ahead of a planned India listing, it reversed that structure in March 2024, merging Groww Inc. into Billionbrains Garage Ventures Private Limited under Section 234 of the Companies Act and India’s cross-border merger rules, with NCLT and RBI clearance. The US exit tax on that move, under Section 367 of the US Internal Revenue Code, came to about ₹1,340 crore ($159.4 million). The company’s underlying business was healthy that year, generating roughly ₹535 crore of operating profit, but the one-time tax charge alone turned FY24 into a ₹805 crore net loss — arguably the most expensive lesson in the company’s history, and a direct cost of a structuring decision made eight years earlier for reasons that no longer applied.

The turning point

The moment that changed how the market talked about Groww was not a funding round or a product launch. It was a data point: in September 2023, Groww’s active client count on the NSE overtook Zerodha’s, ending Zerodha’s run as India’s largest broker by that measure. The gap kept widening rather than closing. By December 2024, Groww’s own reporting put it at 13.16 million active clients and a 26.6% market share. By June 2026, independent aggregation of NSE data showed Groww at 1,30,53,752 active clients and 28.7% share, with Zerodha down to roughly 68 lakh — Groww had gone from level with Zerodha to nearly double it in under three years. What the client-count race obscured, and what shows up clearly in the profit numbers, is that being the largest broker by headcount and being the most profitable broker are different competitions, and Groww has only won one of them.

The money behind it

Groww’s investor list reads like a tour of the 2020-21 fintech funding cycle. It raised a $30 million Series C in September 2020 at a $250 million valuation, led by existing backers Sequoia India (now Peak XV Partners) and Ribbit Capital. Tiger Global led an $83 million Series D in April 2021 that pushed the valuation past $1 billion, making Groww a unicorn. Six months later, in October 2021, Iconiq Growth led a $251 million Series E that took the valuation to $3 billion, with Alkeon Capital, Lone Pine Capital and Steadfast Capital joining existing investors. By October 2021 the company had raised more than $390 million in total. It returned to the table once more before its IPO, raising a further $200 million in 2025 at a $7 billion valuation, led by Singapore’s sovereign fund GIC together with long-time backer Iconiq Capital.

Three backers stand out for what they specifically changed. Peak XV Partners (as Sequoia India) came in earliest, at Series C, and stayed through every subsequent round, lending governance discipline while the company was still finding its business model. Tiger Global’s Series D cheque was the one that made Groww a unicorn and pulled in the growth-stage attention that followed. Ribbit Capital, a fintech specialist with bets across Robinhood and Coinbase’s investing peers globally, backed Groww from Series C onward and pushed it toward the trading and brokerage products that now generate most of its revenue, rather than staying a mutual-fund-only distributor. Groww listed on the NSE and BSE on 12 November 2025, in an IPO that raised ₹6,632.30 crore (a mix of a ₹1,060 crore fresh issue and an offer for sale) at ₹100 a share, valuing the company at $7 billion. Shares opened around 14% above the issue price and closed the debut session up roughly 30%, taking the valuation to about $8.9 billion.

How it makes money

Groww’s app looks free because most of what a retail user sees — opening an account, buying a direct mutual fund, browsing stock research — carries no visible fee. The money comes from what happens after that: a small, flat brokerage charge on every equity trade; a per-lot transaction charge on futures and options that is tiny individually but adds up across an enormous volume of contracts; statutory and exchange charges passed through with a spread; interest income on client funds sitting idle in the app before they are invested (float income); interest on money lent out through its margin trading facility, launched in April 2024, whose loan book had grown to about ₹1,668 crore by early 2026; and, since Groww set up its own asset management company, management fees on the mutual fund schemes it now runs directly rather than only distributes. The part most users get wrong is assuming the “zero commission” mutual fund pitch that built Groww’s brand is still what pays the bills. It is not, and has not been for years — F&O trading, not mutual funds, funds the free-feeling parts of the app, which is exactly why a regulatory clampdown on derivatives trading hits Groww’s income statement so directly.

The numbers

Groww’s revenue nearly tripled between FY23 and FY25 even as its bottom line swung from profit to a large one-time loss and back to a bigger profit. Media reports at the time cited FY24 consolidated revenue of ₹3,145 crore; the restated financials in Groww’s 2025 IPO prospectus show revenue from operations of ₹2,609.28 crore for the same year, a difference the company attributes to reclassification ahead of listing — both figures are shown below since neither has been withdrawn.

The FY24 loss was entirely a function of the one-time US exit tax discussed earlier, not a weak year of trading. Strip that out and Groww has been operationally profitable every year since at least FY23. The most recent quarter on record, Q2 FY26 (July-September 2025), showed consolidated net profit up 12.2% year-on-year to ₹471.33 crore, suggesting the FY25 profit level was not a one-off spike from pre-IPO accounting choices.

Where the money comes from

Groww does not publish a formal segment-wise revenue split, but analysts covering the business estimate that equity derivatives transaction charges alone account for roughly half of revenue, with cash-equity brokerage, mutual fund distribution, float income and the newer margin trading facility making up the rest. That MTF line has grown fastest: it was about 1% of revenue before its April 2024 launch and had reached roughly 5% within two years, alongside its ₹1,668 crore loan book. The surprise, for a company whose founding product and biggest source of new customers is mutual funds, is how small mutual fund distribution actually is as a share of revenue next to F&O trading — the free-to-use product brings people in the door, and the trading product pays for the lights. Groww does not break out revenue by geography, so no city- or state-level split can be verified here.

The risks

The clearest risk is concentration in a business line the regulator actively wants smaller. SEBI’s tightened derivatives framework, phased in from late 2024, cut the number of weekly index expiries, raised the minimum contract size for index derivatives to ₹15 lakh, and moved to upfront collection of options premiums from buyers — changes that, by Groww’s own disclosure, wiped out around ₹203 crore of FY26 revenue and dropped the share of Groww’s users trading F&O to about 10% by the fourth quarter of that year. Any further tightening of derivatives rules would hit the same line again, and it is the line that carries the most revenue.

The second is a thinner margin per customer than its closest listed peer. On FY25 numbers, Groww earned roughly ₹14,100 per active client against Zerodha’s roughly ₹53,600 — a gap that means Groww needs its enormous client base to keep growing, or to trade up into higher-value products, just to hold its profitability steady, let alone close the gap with Zerodha.

The third is structural: the ₹1,340 crore tax bill from reversing its US domicile shows how exposed a company with a global cap table and a history of cross-border restructuring can be to one-time tax events. Any future consolidation involving its AMC, insurance broking or other subsidiaries carries a version of the same risk.

The takeaway

Being the biggest is not the same job as being the most profitable, and Groww’s last three years are a case study in the gap between the two. It won the race for client count by making investing feel as easy as shopping, then had to spend years building the layers — F&O, lending, its own fund house — that would let that scale actually convert into profit comparable to a smaller, older rival. Even having done that, the profit it earns still leans on rules a regulator can rewrite in a single circular, which is a reminder that market leadership measured in users is a starting position, not a guarantee.

Frequently asked questions

Is Groww India’s largest stockbroker?

Yes, by active NSE client count. It overtook Zerodha in September 2023 and by June 2026 held about 28.7% market share with roughly 1.3 crore active clients, close to double Zerodha’s count on the same measure.

Who owns and runs Groww?

Groww was founded in 2016 by Lalit Keshre, Harsh Jain, Neeraj Singh and Ishan Bansal, all former Flipkart employees. Keshre remains CEO and holds about a 9.1% stake. Institutional backers include Peak XV Partners, Tiger Global, Ribbit Capital, GIC and Iconiq Capital, and Microsoft’s Satya Nadella is a personal investor.

Is Groww profitable?

Yes, on an operating basis every year since at least FY23. FY24 showed a ₹805.45 crore net loss, but that was caused entirely by a one-time ₹1,340 crore tax charge on redomiciling from the US to India; FY25 net profit was ₹1,824.37 crore, and the most recent reported quarter showed profit still growing year-on-year.

When did Groww list, and how did the IPO go?

Groww listed on the NSE and BSE on 12 November 2025, raising ₹6,632.30 crore at ₹100 a share and valuing the company at $7 billion. The stock opened about 14% above issue price and closed its first day up roughly 30%, pushing the valuation to about $8.9 billion; by September 2026 its market value had grown further, to roughly $12.2 billion.

What is the biggest risk to Groww’s business?

Its heavy reliance on futures and options trading revenue, which is directly exposed to SEBI’s tightening derivatives rules. Regulatory changes phased in from late 2024 had already removed an estimated ₹203 crore of revenue in FY26 and cut the share of Groww’s users trading F&O to about 10%.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Upstox, “Groww IPO Listing Date: 5 key things retail investors should know”, November 2025
• Business Standard, “Groww shares jump 30% on market debut, valuation crosses $8.9 billion”, November 2025
• Business Standard, “Groww topples Zerodha to become largest broker in terms of no of clients”, October 2023
• BusinessToday, “Zerodha, Groww, Angel One, Upstox: How active clients changed in past 8 years”, April 2026
• StartupTalky, “India’s Stock Broking Market in June 2026: Who’s Gaining and Who’s Losing Clients?”, 2026
• Exponentialcompass (Substack), “Groww has 1.31 crore clients. Zerodha has half that. Zerodha still makes more money.”, 2026
• Groww, “About Groww: Founders, Journey, Investors and More” (company blog, active client and market share disclosure for December 2024)
• Inc42, “Groww’s FY24 Revenue More Than Doubles To INR 3,145 Cr”, October 2024
• Outlook Money, “Groww IPO: Here’s What We Know From Its DRHP Filed With Sebi”, September 2025
• Deccan Herald, “Groww reports net loss of Rs 805 crore in FY24; pays Rs 1,340 crore tax in India domicile move”, October 2024
• TechCrunch, “Groww joins the first wave of Indian startups moving domiciles back home from US”, May 2024
• Treelife, “How Groww’s $160 Million Delaware Tax Bill Became India’s Most Expensive Startup Lesson”, 2025
• TechCrunch, “Groww, backed by Satya Nadella, set to become first Indian startup to go public after US-to-India move”, September 2025
• Medianama, “Groww F&O User Share Drops to 10% After Stricter SEBI Rules”, May 2026
• YourStory, “Money beyond F&O: Groww’s hunt for a new cash cow”, November 2025
• Business Standard, “Groww surges after Q2 PAT climbs 12% YoY to Rs 471 cr”, November 2025
• X / Chandra R. Srikanth, citing sourced pre-IPO FY25 financials (revenue and profit figures), June 2025
• Screener.in, Billionbrains Garage Ventures Ltd consolidated financial statements, accessed September 2026
• Outlook Business, “Groww CEO Lalit Keshre Joins India’s Billionaire Club after Blockbuster IPO Debut”, November 2025
• TechCrunch, “India: Groww raises $251 million in Series E, valued at $3 billion”, October 2021
• Business Standard, “Groww’s valuation shoots past $1 billion with $83 mn Series D funding”, April 2021
• Clay, “How Much Did Groww Raise? Funding & Key Investors”, accessed September 2026

Found an error? Write to us and we’ll correct it in the open, dated, on the piece.