IPO-bound Groww completes acquisition of wealth-tech platform Fisdom after Sebi approval

Groww completes Fisdom acquisition

Country’s largest brokerage firm by users, Groww, has completed the acquisition of wealth management firm Fisdom after market regulator Securities and Exchange Board of India’s approval last week, according to sources familiar with the matter.

The Bengaluru-based Groww, which filed the revised Initial Public Offering (IPO) documents last month, had reached an agreement to acquire wealth management startup Fisdom for a $150 million all-cash deal in May.

Groww did not respond to Moneycontrol's request for comments.

The 100 percent acquisition is expected to expand Groww’s wealth offerings and is the company’s second large acquisition after it acquired Indiabulls AMC in May 2023.

Unlike the other large brokerage houses, Groww has a strong distribution of mutual funds (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.

Fisdom's wealth playbook

Founded in 2015 by Anand Dalmia and Subramanya S.V., Fisdom offers mutual funds, stocks, bonds, portfolio management services (PMS), and tax filing solutions. The company has over a million customers catered to through 15 offices across India. The company is backed by investors such as Prosus, Saama, and Quona Capital.

Fisdom posted a revenue of Rs 84 crore in FY24, a 28 percent increase from the previous year and a 19 percent reduction in net losses to Rs 57.4 crore.

Groww's financials

Groww began in 2016 as a mutual fund investing platform and steadily expanded its offerings by introducing stocks, IPOs, and ETFs in 2020.

Groww reported a three-fold growth in profit to Rs 1,819 crore in FY 25, according to regulatory filings. The company reported a 31 percent growth in revenues at Rs 4,056 crore during FY 25.

Tough times for brokers

Groww’s IPO process is starting at a difficult time for most brokers, as a few regulations have hurt the industry. The negative investor sentiment has also resulted in all four top brokers seeing a third straight month of decline in active investors.

Broking firms are facing higher taxes on trading, lower exchange rebates, and stricter restrictions on retail futures and options trading since late last year.