The country’s largest broker by active investors, Groww, reported a three-fold growth in profit to Rs 1,819 crore in FY 25, according to banking sources who worked on the latest funding round.
The Bengaluru-based fintech, which has filed for IPO with the markets regulator Securities and Exchanges Board of India (Sebi) on May 26, reported a 31 percent growth in revenues at Rs 4,056 crore during FY 25.
The company’s FY24 consolidated revenue stood at Rs 3,145 crore in FY24, while its net profit was Rs 535 crore.
Groww declined to comment on the financials for this story.
Ahead of its IPO, Groww has raised $200 million from Iconiq Capital and GIC. The financial summary is part of the documents Groww filed as part of the fundraising.
The relatively high growth and profitability come as a shot in the arm for the Bengaluru wealthtech platform ahead of its IPO plans. The company is reporting its FY 25 numbers amidst concerns of a slowdown in investor interest as global uncertainties have resulted in high volatility.
During the third quarter of last financial year, Sebi made a few regulatory changes to Futures and Options trading that have hurt most of the top brokers. Sebi has also asked exchanges to stop volume-based rebates to brokers, which also had an impact on brokerages’ revenue.
In FY 24, a one-time domicile tax of Rs 1,340 crore resulted in Groww posting a Rs 805-crore net loss at the consolidated level. The company moved its registered office from Delaware in the US to Bengaluru during the financial year.
IPO plans
As per sources, Groww is likely to take a conservative IPO valuation of $7-8 billion, considering the market sentiment and volatility.
Based on the valuation, a typical 10-15 percent equity dilution could imply an IPO size of around $700-920 million, making it one largest new economy IPOs in the country.
The fintech firm competes with Zerodha and Upstox in online discount broking and offers mutual funds and other financial products. It was last valued at $3 billion in 2021 during its Series E round. Its key backers include Tiger Global, Peak XV Partners, and Ribbit Capital.
Zerodha’s profit grew 62 percent in FY 24 to Rs 4,700 crore while it reported Rs 8,320 crore revenue during the fiscal, a 21 percent growth over the previous financial year. The privately held company's FY 25 numbers have not been disclosed yet.
Meanwhile, in an attempt to diversify its revenue, Groww has agreed to acquire wealth management startup Fisdom in a $150 million all-cash deal, Moneycontrol reported on May 16. The deal is subject to Sebi approval and is likely to take 2-3 months.
Unlike the other large brokerage houses, Groww has a strong distribution of mutual fund (including its own) and systematic investment plans (SIP) portfolio with its large customer base, effectively diversifying its revenue to shield itself from any downturn in stock trading.
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