In a month marked by a steep decline in the stock market, Groww, one of India’s top brokerage platforms, achieved a remarkable feat by significantly growing its user base. Even as the Indian stock market experienced a 6% drop in October, its biggest monthly fall since March 2020, Groww managed to attract 3.5 lakh new users. This brought its active user base to 1.25 crore, positioning Groww as the largest brokerage firm in India, well ahead of its competitors.
For context, Groww’s nearest competitor, Zerodha, has approximately 80 lakh active traders, creating a sizable gap of around 45 lakh users. This difference highlights Groww’s continued appeal, especially among younger and first-time investors, even during volatile market periods.
Rising Demand for Stock Market Investments
Despite the market’s recent declines, investor interest in stocks and mutual funds remains strong. Groww’s user base has nearly doubled in the past year, a growth trajectory significantly faster than that of Zerodha, which saw an increase of only about 15 lakh users over the same period. Groww’s monthly user additions are also more substantial, averaging 5 lakh new users each month, compared to 1.25 lakh for Zerodha. This rapid growth trend for Groww underlines a rising enthusiasm for stock market investments among retail investors.
Active User Metrics Show Broader Investor Interest
According to NSE data, active investors in India are those who complete at least one transaction per year. Currently, there are over 16 crore demat accounts in India, but only about 5 crore of these are actively used. Groww’s ability to draw in such a large number of active investors, even during market dips, showcases a changing sentiment among Indians towards investing, with many recognizing the long-term potential of stock market involvement.
Following Groww and Zerodha, Angel One also showed strong growth, adding 25 lakh users over the past year. This makes Angel One a close competitor to Zerodha, trailing by only 5 lakh users. Upstox, another prominent brokerage, grew its user base from 21.5 lakh to 28.5 lakh in October, continuing its position as one of India’s top brokerages.
Revenue Gap Remains in Zerodha’s Favor
While Groww leads in user growth, Zerodha still maintains its advantage in terms of revenue. In FY 2024, Zerodha recorded revenue of Rs 8320 crore, while Groww generated Rs 2900 crore. Zerodha’s established revenue model and large trading volumes contribute to its financial edge, which could remain a challenge for Groww and other brokerage firms as they scale.
However, the future may present obstacles for these firms. Increasing taxes on trading and lower rebates from exchanges could affect profit margins. Moreover, any potential restrictions on retail F&O trading may impact user activity, which is a major revenue driver for brokerages like Zerodha and Groww. Experts predict that revenues for most broking firms may decline by 30-35% in the second half of FY 2025, posing a challenge to sustaining growth.
A Shift in the Brokerage Landscape
Groww’s rapid rise reflects a broader trend of digitalization in finance and the growing appetite for easy-to-use trading platforms among younger generations. As more Indians are entering the stock market, brokerages are capitalizing on this interest with accessible platforms, educational content, and a user-friendly approach.
