Investment platform Groww has filed an updated Draft Red Herring Prospectus (DRHP) with the markets regulator ahead of its proposed public listing. Here are the key takeaways:
1. Strong user addition and market share gains
Groww reported 18.07 million transacting users as of June 30, 2025. Between June 2024 and June 2025, it added 9.45 million net new demat accounts, capturing 25.8% of all such additions in the country. The platform also accounted for 45.45% of net new NSE active users in the period. According to AMFI data, of the six million new SIPs created in India in June 2025, around two million were on Groww, meaning roughly one in every three new SIPs originated on its platform.
2. Offer Size and Objects of the Issue
The IPO comprises a fresh issue of equity shares aggregating up to Rs 1,060 crore and an offer for sale of up to 574.2 million equity shares by existing shareholders. The company may also consider a pre-IPO placement of up to Rs 212 crore. Net proceeds from the fresh issue are proposed to be used towards cloud infrastructure, marketing spends, augmenting the capital base of its NBFC arm Groww Creditserv, funding the margin trading facility (MTF) business, and for potential acquisitions and general corporate purposes.
3. Surge in revenue and profit
Revenue from operations climbed to Rs 3,901.7 crore in FY25 from Rs 1,141.5 crore in FY23. Profit after tax stood at Rs 1,824.3 crore in FY25, while Q1 FY26 revenue came in at Rs 904.3 crore. Active client growth of 35.5% in FY25 outpaced its peers. .
4. Margins remain high
The contribution margin stayed above 85% in FY25, while PAT margin was close to 40% in Q1 FY26. Average revenue per user (AARPU) stood at Rs 13,702 in FY25. The company said its digital-led model has reduced adjusted operating costs as a share of revenue, falling from 26.3% in FY23 to 13.8% in FY25.
The DRHP also pointed to the rising role of margin trading facilities (MTF). In margin trading, investors can buy shares by borrowing part of the money from the broker instead of paying the full amount upfront. The broker charges interest on the borrowed sum, which becomes an additional source of revenue. For Groww, interest income from MTF rose from just 0.1% of revenue in Q1 FY25 to 3.1% in Q1 FY26, suggesting it is emerging as a growing revenue stream.
5. Regulatory changes impact business
The DRHP highlighted the effect of regulatory moves, including “true to label” requirements and F&O curbs. Derivative active users declined 28% year-on-year in Q1 FY26, while fees and commission income dropped 17.5%. Revenue from operations also fell 10% sequentially in the quarter.
6. Limited promoter sell-down in IPO
Promoters currently hold 27.97% in the company and will sell only 0.07% of the total shares in the IPO. The filing also pointed to a growing share of affluent users, those with assets of Rs 25 lakh or more, who contributed 33.2% of total customer assets as of June 2025, up from 20.3% in FY23.
7. Key risks highlighted in the DRHP
Regulatory exposure: Groww operates across broking, NBFC lending, and margin funding, exposing it to SEBI and RBI regulations. Changes in compliance norms could materially affect its operations.
F&O tightening: Derivatives remain a key revenue driver. Industry-wide turnover fell 38% between June 2024 and June 2025, and further restrictions could impact revenue.
Market-linked volatility: Revenues are heavily transaction-driven. In Q1 FY26, revenue from operations fell 10% year-on-year as retail participation slowed, underlining the cyclical nature of the business.
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