Management

• Gaurang Shah (Chairman and Independent Director)
• Lalit Keshre (Whole-Time Director and Chief Executive Officer)
• Harsh Jain (Whole-Time Director and Chief Operating Officer)
• Neeraj Singh (Time Director and Chief Technology Officer)
• Ashish Agrawal (Nominee Director)
• Neetu Kashiramka (Independent Director)
• Ankit Nagori (Independent Director)
• Neeru Chaudhry (Independent Director)
• Ishan Bansal (Whole-Time Director and Chief Financial Officer)

Use of Proceeds

The total issue size is Rs. 6,632.30 cr, which comprises a fresh issue of Rs 1,060.00 cr and offer for sale (OFS) of Rs 5,572.30 cr. Tata Capital intends to utilize the net proceeds from the issue towards expenditure towards cloud infrastructure (Rs 152.50 cr),  brand building and performance marketing activities (Rs 225 cr), investment in one of the material subsidiaries, GCS, an NBFC, for augmenting its capital base (Rs 205 cr), investment in one of the Material Subsidiaries, GIT, for funding its MTF business (Rs 167.50 cr), and funding inorganic growth through unidentified acquisitions and general corporate purposes.

Competitive Strengths

“Groww” is a well-known and preferred brand for investing across cities, towns and villages in India Groww has emerged as one of India’s most recognized brands in retail investing, leading in search interest among the top ten brokers on Google Trends in FY25, as per Redseer. It captured the highest app download share at 38.18% among the top five brokers from FY22 to June 2025, reflecting its strong brand trust and popularity. Organic customer acquisition remains high, with over 83% of users joining without paid marketing. Active users span 98.36% of Indian pin codes, and about 81% come from outside major cities, highlighting its deep penetration into smaller towns and rural regions.

High customer retention, engagement and price in-elasticity Groww’s strong retention is supported by sustained engagement and customer trust. Approximately 77.7% of users who completed three years on the platform remained active, while first-quarter retention post-acquisition ranged from 84.79% to 92.98% since FY22. Average daily user engagement reached 65.5 minutes in FY25, supported by content such as news updates and personalized notifications. The DAU/MAU ratio among transacting users stood at 56.29% in FY25. Despite fee hikes in October 2024, Groww maintained growth, contributing 40.08% to NSE’s net user additions and increasing its retail cash ADTO market share to 21.6% in Q3FY25.

Customer-friendly design for enhancing investing experience Groww’s app and website focus on simplicity, transparency, and user experience, offering tools suited to both beginners and advanced traders. Its “user-friendly” design has been consistently rated as the most appreciated feature on Google Play from FY23 to June 2025, according to Appbot. The design team, led by Promoter Lalit Keshre, incorporates customer feedback to refine products and interfaces. The platform uses intuitive color cues, clear information hierarchy, and embedded customer support features. This inclusive design helps users navigate investment decisions easily, promoting accessibility for non-English-speaking investors and enhancing overall engagement across diverse demographics.

In-house technology stack to deliver a differentiated experience at low cost Groww has built a proprietary technology ecosystem capable of handling 50 million users and processing 50 million daily orders with performance matching UPI-level transaction speeds. Its systems integrate with multiple exchanges and third-party partners, ensuring smooth operations and reliability. AI and machine learning enhance onboarding, payments, automation, and support. Groww UPI handled 77.84% of total deposit transactions in Q1FY26, improving success rates and efficiency. The ORBIT system manages trade reconciliation and settlements, while Groww Lite provides disaster recovery. These innovations have reduced the Cost to Serve ratio from 15.85% in FY23 to 14.80% in Q1FY26.

Entrepreneurial culture and strong execution delivering growth and profitability Groww fosters an ownership-driven culture with a promoter-led vision and cross-functional “pod” teams enabling agile decision-making. Around 77% of employees hold ESOPs, reinforcing accountability and innovation. The “Ab India Karega Groww” initiative promotes financial literacy across cities while offering employees real-world exposure to customer needs. This customer-first and technology-led approach ensures scalability and cost efficiency. Adjusted Cost to Operate declined from 26.32% in FY23 to 13.77% in FY25, highlighting operational leverage. The asset-light model enables conversion of profits into free cash, supporting reinvestment, product expansion, and sustainable long-term profitability.

Peer Comparison

Key Risks & Concerns

Dependence on market cycles and investor sentiment: Groww’s business performance remains highly sensitive to fluctuations in capital market activity and investor sentiment. Active clients on NSE declined from approximately 3.8 cr in June 2022 to 3.1 cr in April 2023, while Groww’s new transacting users decreased from 29 lakh in FY22 to 24 lakh in FY23. In Q1FY26, new transacting users further dropped to 7.6 lakh, nearly half of the 16.7 lakh recorded in the same period last year. Any prolonged downturn in market participation or investor confidence could significantly reduce trading volumes, asset inflows, and overall revenue growth.

Platform reliability and technology risk: Continuous platform availability is critical for maintaining user confidence and smooth transaction execution. In FY25, 27.62% of total expenses were allocated to software, server, and technology infrastructure. Despite these investments, the company experienced operational disruptions, including firewall failures and server outages in FY24. Any extended or recurring system downtime could disrupt user access, affect transaction volumes, and damage customer trust and brand reputation, potentially leading to customer attrition and financial loss.

Regulatory changes: Groww operates under stringent regulations from SEBI, RBI, and stock exchanges, exposing it to frequent policy changes. SEBI’s October 2024 derivatives reform led to a 36.31% decline in retail participation in F&O trading and a 38.07% fall in notional daily turnover between June 2024 and June 2025. Similarly, RBI’s November 2023 circular raised risk weights on consumer credit exposures, affecting Groww Creditserv’s lending margins. Ongoing or abrupt regulatory interventions can alter operating dynamics, constrain product offerings, and impact profitability across key business segments.

Outlook and Valuation

India’s investment and wealth management market presents a vast growth opportunity with penetration still low compared to developed economies. Only 16–18% of Indian adults have demat accounts, while active broking participation stands at about 5% versus 62% in the U.S. The total addressable market is valued at Rs 1.1 trillion in FY2025 and is projected to grow to Rs 2.2–2.6 trillion by FY2030. The investor base is expected to nearly double to 120–130 million as digital adoption, income levels, and financial awareness rise. This landscape positions Groww to capitalize on increasing product adoption, expanding user engagement, and deeper market penetration.

Groww’s strategy centers on brand expansion, product diversification, and enhanced customer relationships. The company aims to strengthen its “pull” brand image nationwide through campaigns emphasizing trust and inclusivity, expanding its customer base and driving word-of-mouth growth. Its new wealth management offering, “W by Groww,” targets affluent users seeking advisory and portfolio management, while the core platform continues to serve first-time and retail investors. The firm is broadening its product suite with features such as margin trading, commodity derivatives, API trading, loans against securities, and bonds, ensuring comprehensive coverage across investment needs and supporting increased revenue per user.

Technology and strategic acquisitions remain central to sustaining scalability and profitability. Groww plans continued investment in its in-house tech stack, integrating AI, machine learning, and data analytics to enhance user experience, regulatory compliance, and operational efficiency. Its engineering and cybersecurity teams drive rapid innovation and reliability across millions of users. Acquisitions such as Indiabulls AMC and stakes in Digio and MSEI strengthen its ecosystem and enable expansion into asset management and wealth advisory. Through this blend of technology-led operations, diversified offerings, and inorganic growth, Groww is positioned to maintain leadership in India’s rapidly evolving digital investment landscape. At the upper end of the price band, the issue is valued at 30x FY25 EPS. We believe IPO is reasonably priced. We recommend a SUBSCRIBE rating to the issue for the long term.