Zerodha rival Groww's revenue jumps 119% to Rs 3,145 crore in FY24, losses stood at Rs 805 crore

Stockbroking giant Groww recorded significant growth in the fiscal year ending March 31, 2024 (FY24). The company's revenue surged to Rs 3,145 crore, marking a 119% increase from Rs 1,435 crore in FY23.

This growth was fueled primarily by income from subscription fees, commissions, and revenue generated through its tech platforms and support services.

Despite a steep rise in revenue, the company posted a net loss of Rs 805 crore, largely due to a one-time tax payment.

Domicile shift leads to significant tax payment

Groww's shift in domicile to India earlier this year resulted in a hefty one-time tax payment of Rs 1,340 crore, which significantly impacted its overall net profits.

This tax cost is in line with a broader trend where Indian startups relocate their headquarters to India, a process often referred to as "reverse-flipping."

The move allows companies to align with India's evolving regulatory framework and makes them more appealing for potential public offerings (IPOs).

However, this shift can carry high costs, as seen with other fintech firms like PhonePe and Razorpay, which faced similar tax obligations when relocating.

Operational profitability maintained

Despite the tax-related setback, Groww maintained operational profitability. The company reported an operating profit of Rs 535 crore for FY24, up from Rs 458 crore in the previous fiscal year, reflecting a 17% increase.

Groww’s core broking business contributed significantly to this growth, with revenue from this segment doubling to Rs 2,899 crore from Rs 1,294 crore in FY23.

The company's stockbroking unit, in particular, performed well, helping it sustain its growth trajectory.

Expansion of services and investor base

Originally founded in 2016 as a mutual fund investment platform, Groww has since expanded into various financial services, including stock trading, consumer lending, payments, and asset management.

The company introduced stocks in 2020 and continued to diversify its offerings, helping it attract a larger user base.

By May 2024, Groww surpassed 10 million active stock investors, becoming the first discount broker in India to reach this milestone. As of October 2024, Groww reported having 1.2 crore active investors.

While Groww leads in terms of user base, Zerodha is still far ahead in financial performance. Zerodha reported Rs 8,320 crore in revenue and a net profit of Rs 4,700 crore for FY24, outpacing the VC-funded Groww.