Groww Invest Tech saw its operating revenue jump 123% YoY to INR 2,899 Cr in FY24 from INR 1,294 Cr in FY23
Credit agency ICRA attributed the surge in revenues to the continued growth in the unicorn’s client base and rising broking volumes
However, ICRA said that the fintech unicorn was “susceptible to intense competition, regulatory changes and technological risks”
Groww
Invest Tech, which operates online stock broking giant Groww, reported a 4X year-on-year (YoY) jump in its net profit to INR 297.8 Cr in the fiscal ended March 2024 (FY24), as per information shared with credit rating agency ICRA.
In contrast, the company clocked a profit after tax (PAT) of INR 73.1 Cr in the the financial year 2022-23 (FY23).
As per an ICRA report, Groww Invest Tech, formerly Nextbillion Technology Private Ltd, also saw its operating revenue jump 123% to INR 2,899 Cr in the fiscal under review from INR 1,294 Cr in the year ago period.
The credit agency attributed the surge in revenues to the continued growth in the unicorn’s client base and rising broking volumes. Citing NSE data, the report noted that Groww ranked first in terms of NSE active clients as of August 2024, with a nearly 25% market share.
It also said that despite the company’s recent foray into the margin trading facility (MTF) business, which “will lead to higher dependence on borrowings”, the financial leverage is expected to remain comfortable.
“The company reported a return on net worth (RoNW) of 40.3% in FY24, despite paying sizeable fees for the software, server and technology services availed from the parent,” added ICRA.
It is pertinent to note that Groww Invest Tech is a subsidiary of Billionbrains Garage Ventures, which also operates entities such as Neobillion Fintech, Groww Asset Management, Groww Pay Services, Groww Insurance Broking, Billionblock Finserv, among others in India.
However, ICRA said that the fintech unicorn was “susceptible to intense competition, regulatory changes and/or technological risks”. It also added that the Securities and Exchange Board of India’s (SEBI) recent mandates on uniform fee structure for market infrastructure institutions (MIIs) will likely impact the profitability of the overall broking industry, particularly discount brokers such as Groww.
“Nonetheless, it is noted that GIT’s profitability at the standalone level remains constrained by the elevated cost-to-income ratio. A sizeable portion of the operating expenses is on account of the software, server and technology services availed from BGV,” added the report.
Founded in 2017 by Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal, Groww is an online discount broking platform that allows users to invest in stocks, exchange-traded funds (ETFs), and IPOs.
Backed by the likes of Peak XV Partners, Tiger Global and Propel Venture Partners, the fintech unicorn has raised more than $393 Mn in funding to date.
The development comes close on the heels of Groww shifting its domicile back to India in March this year. As part of this, the company merged its US-based holding company, Groww Inc, with its Indian parent entity, Billionbrains Garage Ventures.
Groww’s parent Billionbrains Garage reported a net profit of INR 448.7 Cr in FY23 compared to a net loss of INR 239 Cr in the previous fiscal. Meanwhile, operating revenue more than tripled to INR 1,277.8 Cr in the fiscal ended March 2023 as against INR 351 Cr in FY22.
