Groww’s IPO Journey: Charting a Path to Success?

Groww, founded in 2016, has grown from a simple mutual-fund app into one of India’s largest retail-investing platforms. By mid-2025 it claimed roughly 12–13 million active broking clients, which is about a quarter of India’s retail trading market. Its easy-to-use mobile app (100+ million downloads) and free equity trading helped it overtake long-time rival Zerodha (with only ~7.7 million users). Groww’s rapid rise attracted heavy funding. It has raised ~$600–700 million from marquee investors (Peak XV Partners, Tiger Global, Ribbit, YC, Satya Nadella, and most recently Singapore’s GIC) and was last valued around $7 billion. In 2025 it closed a $200 million round (GIC/Iconiq) at roughly $7–7.3 billion pre-money.

This summer, Groww took its biggest step yet, which is a reverse merger and IPO filing. Its US holding (Billionbrains Garage Ventures) was flipped into an Indian entity, triggering a one-time $160 million tax (₹1,340 crore) on repatriated gains. The company quietly filed a draft red herring prospectus with SEBI on May 26, 2025, aiming to raise about $800–1,000 million. On August 28, 2025 SEBI approved the IPO. According to news reports, Groww is targeting an $8–9 billion valuation for its listing. The IPO (planned for Q4 2025) will combine fresh equity with secondary sell-downs by early backers (Tiger Global, Peak XV, etc.). If all goes well, Groww would be among India’s first pure fintech startups to go public.

Financial Strength and IPO Readiness of Groww

Groww’s financials paint a picture of rapid growth and mounting profitability. In FY2023-24 it earned ₹3,145 crore in revenue, more than double the previous year, while reaching operating profitability (₹535–545 crore operating profit). A one-time tax on its reverse merger, however, drove FY2024’s net profit to a ₹805 crore loss. The following year, FY2024-25, saw a sharp rebound as the revenue climbed 31% to ₹4,056 crore and profit after tax jumped roughly 3× to ₹1,819 crore.

This turnaround is remarkable in an industry where many new-age fintechs burn cash. In fact, Groww’s FY2024-25 profit (₹1,818 crore) was achieved despite broad headwinds in the broking business. A recent ROC filing highlighted these results that Groww “reported a profit after tax of ₹1,818 crore” on revenue ₹4,056 crore (FY25), tripling its previous-year PAT and continuing double-digit growth.

Groww’s profitability has surged. In FY2025 (Apr 2024–Mar 2025) the company reported ~₹4,056 crore in revenue and ₹1,819 crore in profit after tax(up from ₹3,145 crore revenue and ₹545 crore PAT in FY2024). This robustness allowed Groww to aggressively invest in growth. It has already launched its own mutual fund AMC, acquired Indiabulls Mutual Fund, and recently struck a deal to buy the wealth-management app Fisdom for about ₹1,280 crore. These moves diversify Groww’s business beyond brokerage into fund management and advisory.

Groww’s strong cashflows and conservative capital use set it apart. As one analyst notes, Groww has proved very capital-efficient as it reached market leadership while remaining profitable in FY23 and FY24. A research highlights that Groww’s operational profit rose 17% in FY24 (from ₹458 to ₹535 crore) alongside a 119% jump in revenues. That contrasts with many VC-backed fintechs that stay unprofitable. With the IPO proceeds, Groww plans to fund tech development and expansion of new services.

The IPO comes at a somewhat ironic time when India’s digital broking industry is under pressure from new regulations. Stricter SEBI rules (higher margins and taxes on futures/options trading) have dampened turnover. In fact, leading brokers saw millions of active accounts leave in 2025. Groww alone lost ~600,000 clients from Jan–July 2025. Competitors such as Zerodha and Angel One also shed clients in mid-2025. Even so, Groww believes the overall market is still underpenetrated as retail participation (active demat users) has more than quadrupled in five years, and millions of young investors remain to be captured.

Product Portfolio and Market Position

Groww began as a mutual-fund investment app and quickly expanded into a full-service investment platform. Today its products include

Mutual Funds: Direct plans (no commission) for ~5000+ schemes, with SIP (systematic investment plan) tracking and advice. Groww’s SIP distribution engine is a key strength, attracting new retail investors.

Equity Trading: Commission-free cash-equity trading on NSE/BSE. For margin/F&O trades it charges flat fees (e.g. ₹20 per contract), similar to rivals. 

IPO and NFO Applications: Online subscription to IPOs and mutual fund NFOs via its app. 

US Stock Investing: Access to US equity markets through tie-ups, enabling Indians to buy US-listed stocks and ETFs. 

Digital Gold and ETFs: Purchase of Sovereign Gold Bonds and gold ETFs, often integrated in the same app. 

Insurance Products: Bancassurance offerings (term life, health, general insurance) via partner insurers.

Financial Services (planned): Ventures into credit (e.g. personal loans) or robo-advisory, plus its own mutual fund schemes (Groww AMC) including index funds.

Groww’s growth strategy has been to onboard new investors with simple, low-cost offerings (mutual funds and equity) and then cross-sell broader services. Analysts note that unlike Zerodha, which grew via aggressive F&O trading fees, Groww initially focused on attracting SIP investors before letting them graduate to equities. This approach appears to be paying off as over FY2024-25 Groww added roughly 3.3 million net new active clients (up 36%). It even facilitated “more than one-third of all new demat accounts opened in fiscal 2025”. The app’s popularity (over 100 million downloads, per Google Play) also underscores its broad reach.

As of August 2025, Groww claims the largest market share by client count among brokerage apps. NSE data shows Groww’s share at ~26–27%, with Angel One ~16%, Upstox ~5.7%, and Zerodha ~16–17%. Note this is by active clients; by revenue, Zerodha (which dominates F&O volumes) still leads. Nevertheless, Groww’s rapid expansion makes it a clear frontrunner in bringing new Indians into capital markets. Its marketing of “groww your money” and user-friendly design resonate well with young, first-time investors.

Competitive Landscape

Groww faces stiff competition on multiple fronts. In equity broking, its main rivals are:

• Zerodha: The pioneer discount broker, with a mature user base (reportedly ~8–9 million clients) and an ecosystem of apps (Kite, Coin, etc.). Zerodha was last valued around $5–7 billion. Zerodha focuses heavily on F&O trading, from which it derives much revenue. However, recent NSE data suggests Zerodha lost market share in mid-2025 as some clients moved to others.
• Upstox: Backed by Ratan Tata, it has ~2.6 million active clients (5–6% market share). Upstox has invested in technology but has occasionally suffered service outages, prompting some client churn.
•  Angel One (Angel Broking): A full-service broker (listed) that has pivoted to a “discount model” via its app. It has ~7.45 million clients (15.9% share). AngelOne is a sizable public company (~$2.5b market cap) but saw profit drop 49% in Q4 FY25 amid the trading slowdown.
• Paytm Money: A fintech wing of Paytm’s payments empire, offering free equity trading and MF. It grew impressively in 2024 and added another ~22,000 clients in July 2025 (up 4% in April alone). Paytm Money now has around 690k active clients (6.89 lakh), far behind Groww but on an upward trajectory. It has aggressive marketing and benefits from the Paytm brand.
• Traditional Brokers: ICICI Securities, HDFC Securities, Kotak Securities, etc., each have 1–2 million clients but charge higher fees. Some of these banks have introduced low-cost plans to stem defections to apps like Groww.
• Other Fintech: ETMoney, Kuvera (for mutual funds); and smaller brokers like 5paisa, IIFL, etc., which nibble at niches.

In mutual fund distribution, Groww competes with Zerodha’s Coin, Paytm Money, ETMoney, and direct-to-consumer players like Kuvera. Here Groww’s strengths are commission-free direct plans and educational content. Its new Groww AMC adds a proprietary channel for its own index funds, giving another revenue line.

Fintech IPO Environment: Paytm and Zomato Lessons

Groww’s IPO will be closely watched against recent tech listings. Unfortunately for new-age IPOs in India, the track record is mixed. The Economic Times notes that since Paytm’s late-2021 debut, more startup IPOs have fallen than risen above their issue price. Examples include Paytm (down ~65% from IPO price), Delhivery, Nykaa, Ola Electric, MobiKwik, and others. Only a few tech IPOs, notably Zomato have somewhat rewarded investors. Zomato’s stock is trading around 200% above its IPO price, thanks to solid fundamentals and growth. Similarly, PB Fintech (Policybazaar) and Netweb did well.

What caused these mixed results? Analysts say many startups came to market during late-stage bull markets on overly aggressive valuations. The pressure to deliver astronomical returns led to lofty IPO pricing, often on the promise of future growth rather than present profits. When market sentiment turned cautious in 2022–25, investors punished companies with thin profitability. As one market watcher put it, “Public investors aren’t looking for bold promises; they want clear, profitable growth”. Indeed, after Paytm’s IPO, questions about its path to profit and business model sapped confidence. Paytm’s stock is still far below its issue level.

For Groww, these lessons cut both ways. On one hand, its IPO is happening in a market that has grown more discerning. Tech founders are under pressure to price realistically. The reported $7–9 billion valuation (10–15× FY24 PAT) is modest compared to some $30b+ valuations of Swiggy/Ola during their launches.

On the other hand, Groww does offer unusual positives. It is profitable on core operations, and its growth remains healthy. How retail investors will react is uncertain. Those burned by Paytm may be wary, yet many millennials love Groww’s app and may eagerly buy the story of “democratizing investing.” Grey-market premium data (if available) will be a good indicator of early retail enthusiasm, but as of now that remains to be seen.

Market and Investor Sentiment

Early signs suggest a cautious but interested market attitude. Institutional investors are likely to participate heavily. Bankers are reportedly arranging additional shares and encouraging early backer exits to meet demand. The involvement of marquee names (Tiger, Ribbit, GIC, Peak XV) lends credibility. However, some analysts advise prudence. A source notes that broking firms like Groww face a “hiccup” with recent SEBI curbs like taxes on trading and tighter F&O norms, that could cut revenue 30–50% in late FY25. Until the Draft Red Herring Prospectus is reviewed, they prefer “wait and see” on the valuation. Similarly, the Hurun Report suggests marking down fintech valuations by about 20% given current trends.

Regulators have so far been neutral-to-supportive. SEBI’s nod (pending public notice) signals no major objections to Groww’s plan. The Competition Commission also cleared GIC’s acquisition of a ~2.14% stake in Groww (a requirement under merger rules). This shows that by mid-2025 Groww had assembled the necessary regulatory approvals for a clean launch. At the same time, Groww will need to stay mindful of the evolving oversight in fintech. SEBI and other bodies are watching investor protection closely, especially after past IPO controversies. But there’s no sign Groww has any red flags.

Retail investors, for their part, may view Groww as a relatively safe way to play India’s digital finance boom. Groww’s branding as an investment platform (versus, say, a speculative crypto app) and its robust profits may ease fears. And unlike Paytm, Groww has always shown profitability on an operating basis (even if one-time items swung its net income temporarily).

Of course, some retail chatter notes that banks and other apps could copy Groww’s features at any time. Naveen Kulkarni of Axis Securities warned that in finance “it is only a matter of time before someone with more money replicates what you do”. Another observer cautioned that even with profits, Groww may not deserve the sky-high multiples that food-tech startups commanded. In short, analysts advise investors to temper expectations and focus on long-term growth rather than immediate pops.

Challenges Ahead

Groww enters the public markets with clear advantages, but also significant challenges. Key hurdles include:

• Regulatory Headwinds: The recent SEBI measures (higher margins, extra taxes on certain trades, and tiered-expiry changes) have already cooled retail activity. If trading volumes stay muted, brokers’ revenues may suffer. During early FY25, Angel One’s profits plunged 49% (and its revenue fell 22%) as a direct result. Groww will feel these effects if market volatility remains low.
• Intense Competition: 32+ brokers now have over 100,000 clients. Apart from fellow discount platforms, legacy full-service brokers (ICICI Direct, Kotak, HDFC) and new entrants (PhonePe Share Market, etc.) are vying for the same first-time investors. Banks and older players can cross-subsidize cheaper plans from their large balance sheets. Groww must continuously innovate its tech and customer experience to stay ahead. (For example, Groww recently added “Trader Mode” tools for active traders, mirroring features on Zerodha’s Kite or 5paisa).
• Valuation Expectations: The $7–9 billion target valuation is high in absolute terms. For comparison, Zerodha’s self-valuation last year was about $5–7 billion, and Angel One’s market cap is ~$2.5 billion. Achieving this valuation will require sustaining high growth. Any miss in future guidance could pressure the stock (as happened with Paytm).
• Sustaining Growth: Groww grew revenue ~30% in FY25, but that came off a strong 2024 base. Maintaining 30–40% growth year after year is harder. India’s retail base isn’t growing infinitely fast; recent data shows total active trading clients plateauing (from ~4.9 crore in Dec 2024 to ~4.7 crore in mid-2025). If new demat account additions remain sluggish, Groww must either grab market share from incumbents or expand into new products to keep growing. Its push into wealth management (via Fisdom) and asset management (Groww AMC, Indiabulls AMC) is a step in that direction.
• Future Profitability: The app is profitable today, but will its margins hold? Brokers typically earn small margins per trade. Any further regulation (for instance, caps on brokerage fees, if ever considered) could tighten the screw. Also, unlike say a pure software firm, broking has capital and regulatory costs. Groww’s own prediction is it expects to remain op-profitable even post-regulations, but market scrutiny will be high.

Future Outlook

Despite these challenges, Groww has several strategic levers for future success:

• Broadening Offerings: Beyond Fisdom and AMCs, Groww is exploring even more financial verticals. It recently began offering personal loans (through partners) and aims to roll out a savings/bank-integration product. It could enter credit cards or insurance underwriting next. Each new product keeps existing users engaged longer and increases revenue per customer.
• Technology and Scale: The parent estimates their equity investors surpassed 3 million by end-2024. At scale, operating costs per user fall (mobile app overhead is mostly fixed). The platform’s tech stack (cloud-based, microservices) should support millions more customers without linear cost increases. This scalability underpins the high valuations cited by early investors.
• Macro Tailwinds: India’s retail investing is still relatively small compared to Western markets. Currently only ~4–5% of Indians own stocks, even after the pandemic-era boom. Groww stands to benefit from any rise in equity participation. Financial literacy campaigns and simplified apps may coax more people to start small investing. If stock markets rally or the economy grows, more Indians tend to trade, indirectly boosting Groww’s volumes.
• Listing in Thirsty Markets: Timing the IPO in India’s heated IPO market (India accounted for ~12% of global IPO proceeds in H1 2025) could help achieve a strong debut. Retail appetite for share offerings remains high, as seen in oversubscribed IPOs across sectors. The consumer-friendly brand might generate enthusiasm similar to how Nykaa or Burger King did in their sectors (though those are different industries).

At the end…

Groww’s upcoming IPO is a landmark for Indian fintech. The company has demonstrated impressive growth and profitability, backed by top-tier investors, and occupies a leading niche in India’s booming retail wealth-tech space. It faces meaningful headwinds, from competitive pressure to regulatory constraints, that make success uncertain. Much will depend on market sentiment when the shares hit the exchange, and on Groww’s ability to continue expanding its business beyond simple stock broking.

If the management and bankers price the deal realistically (as analysts recommend) and ride out near-term volatility, the offering could be well-received. Retail and institutional investors may view Groww as a unique chance to own a profitable fintech platform, unlike many hyped loss-making startups. In the medium term, Groww’s fate as a public company will hinge on delivering steady growth and justifying its valuation through transparent execution. The IPO will mark not just an exit for early backers but the start of a new phase for Groww. The true test of whether its “grow your money” pitch works as a public enterprise is now in question