Dhan turns profitable with Rs 177 crore in FY24 as revenue surges by 689%

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Moneylicious Securities Private Limited (MSPL), the firm that runs investment and trading app Dhan, has reported a net profit of Rs 177 crore for FY24, recovering from a loss of Rs 26 crore in FY23, per the provisional figures filed with rating agency Care Ratings.

This profit increase was driven by a surge in brokerage income from its growing active customer base.

Active clients soared to 4.69 lakh in FY24, up from 1.07 lakh in FY23 and 40,247 in FY22.

The company’s focus on enhancing the user experience, along with effective marketing strategies via social media and events helped it attract new traders. Moneycontrol had previously reported on Mumbai-based Dhan fast catching up with the peers registering a 330 percent growth in active user base since May last year.

Led by former Paytm executive Pravin Jadhav, Dhan emerged as the tenth largest stock broking app in the country in August by adding 60,000 investors during the month. It added around 50,000 active investors every month since April, cumulatively adding close to 3 lakh users in the past five months.

ALSO READ: Dhan displaces Paytm Money to enter the list of top 10 stock broking platforms

Total income skyrocketed 689 percent to Rs 379 crore from Rs 48 crore in FY23 while operating expenses rose by 101 percent due to higher employee costs and commissions.

“As on March 31, 2024, MSPL had free cash and bank balance of Ra 43.44 crore and unutilised overdraft, BG or working capital demand loan (OD/BG/WCDL) lines of Rs 63.85 crore. The company has also been maintaining sufficient margin with the exchange above the required limit, providing additional comfort,” the note mentions.

MSPL focuses on retail broking services in segments such as equity, futures and options, commodities, and currency, along with offering demat account services.

Holding a market share of 1.31 percent as of May 31, 2024, Dhan has improved its ranking from 45th in FY22 to 13th in FY24 on the NSE’s active client list. The company also achieved significant trading volumes, accounting for over 2.5 percent of NSE and BSE trades and more than 7.5 percent of MCX contracts.

ALSO READ: Unicorn alert! Trading startup Dhan in discussions to raise $100 million at $1.5 billion valuation

Floated by Paytm Money's former chief executive Pravin Jadhav, the stock trading and investment platform recently launched mutual fund investments on the back diversifying its offerings and attracting long-term investors.

Moneycontrol had exclusively reported that Raise Fintech Ventures, the holding entity of MSPL, plans to raise around $100 million in a fresh round which will catapult the company’s valuation to $1.2-1.5 billion and earn it a place in the coveted unicorn club. Beenext, Mirae Asset Venture Investments, 3one4 Capital, Rocketship.vc are some of the company’s existing investors.

The fund raising comes at a time when Indian stock markets have been touching new highs on the back of robust retail participation, even as the government and the markets regulator has raised the red flag on heightened F&O activity.

Three-year-old Dhan competes in the aggressive discount broking space, dominated by the likes of Groww and Zerodha, who have been able to amass a large user base over the years.

Like most others, even Dhan has managed to register a strong growth in a short span, with a 330 percent jump YoY. That even as many others are either stagnating or seeing a drop in their user base as competition intensifies.

Recently, the country's largest stock broking firm by active investor base, Groww, reported that its revenue more than doubled to Rs 2,900 crore in FY24.  The Bengaluru-based discount broker has reported a four times growth in net profit at Rs 298 crore during the financial year ending March 2024.

Meanwhile, Nithin Kamath-led Zerodha reported revenue of Rs 8,320 crore and net profit of Rs 4,700 crore. Zerodha had around 79 lakh active investors on its platform.