The Securities and Exchange Board of India (SEBI) is right to consider imposing restrictions on Futures and Options (F&O) trading, as their primary duty is to protect consumers, said Lalit Keshre, co-founder and CEO of discount broking firm Groww.
Keshre was speaking at Moneycontrol Startup Conclave in Bengaluru on August 9. He added that Groww’s vision aligns with SEBI’s, and said that investor protection is key for long-term growth.
“The primary purpose of regulators is to protect the investors. We share that goal. The idea is to reduce risk and help in long-term growth,” Keshre said.
A couple of regulations concerning exchange rebates based on the volumes executed by brokers, as well as potential restrictions on F&O trading, are likely to have a sizable impact on Groww’s revenue and profits. However, Keshre said that the company is not heavily dependent on F&O trading.
“Groww is not an F&O company, but a financial services company. Hardly 15 percent of our customers do trading. Trading is a zero-sum game. Investing is a win-win game. We encourage responsible trading,” Keshre said.
Late last year, Groww surpassed Zerodha as the largest broking company and in this May, the company saw the total number of active traders on the platform grow to over 10 million users.
“We don't think much about competition. The number of customers show the impact you created,” Keshre said adding that market leadership is a vanity metric as the opportunity is huge in the country.
According to Groww, the company managed to corner a large market, thanks to its customer-centric approach.
"We started most of our products based on customer feedback. Our roadmap is based on what customers are asking us to do. Everything we have done so far is based on talking to customers,” Keshre said.
The market investment growth story has come as access to financial services has been bridged by the internet, e-KYC and Aadhaar, especially by helping customers in tier 2 and tier 3 cities to join the boom in equity investing.
"As a company, we have visited and met people from 150 cities. The access to invest was missing in the country. Multiple things came together like Aadhaar, eKYC, internet broke barriers. This created an opportunity that we could exploit.” Keshre said.
According to Keshre, when Groww started, there were only 20 million investors in the markets, whereas the number of demat accounts in the country stood at around 150 million in 2024.
Watch the full edition of the Moneycontrol Startup Conclave 2024 here.
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