Groww (Nextbillion Technology Pvt Ltd) IPO

Company overview

Groww (Nextbillion Technology Pvt Ltd) is India's largest retail investment platform with 11+ crore registered users and 1.3 crore active investors. Founded in 2016, Groww democratised investing for first-time investors by building a frictionless mobile-first platform for stocks, mutual funds, F&O, IPOs, and digital gold.

The company turned profitable in FY2024 with ₹14 crore PAT and scaled dramatically to ₹506 crore PAT in FY2025 — a 36x improvement in one year.

Business model

Groww earns primarily from:

• Brokerage on F&O trading (~78% of revenue) — flat fee per order
• Distribution commissions on mutual funds, insurance, NPS
• Margin funding interest on leveraged positions

The F&O dependency is a double-edged sword: massive revenue but subject to SEBI regulatory risk.

Financial breakdown

| Metric | FY2023 | FY2024 | FY2025 | |--------|--------|--------|--------| | Revenue (₹ Cr) | 734 | 1,294 | 2,445 | | PAT (₹ Cr) | -805 | 14 | 506 | | ROE (%) | — | 2.1 | 34.2 | | Active users (Cr) | 0.6 | 0.9 | 1.3 |

Revenue grew 89% YoY in FY2025. PAT turnaround is dramatic and recent — investors must judge sustainability.

Risk analysis

High conviction risks

1. F&O regulatory risk — SEBI has repeatedly tightened F&O rules in 2024–25. A ban on weekly expiry contracts reduced retail F&O volumes by 30%+. Groww's 78% revenue from F&O is existential exposure.
2. Competition — Zerodha, Angel One, Upstox are well-funded and not going anywhere. New entrant Jio Financial is the wildcard.
3. Valuation — At 45x FY2025 earnings, there is minimal margin of safety. Any earnings miss will punish the stock.

Lower conviction risks

• Platform outages during high-volatility periods (past track record is poor)
• Cyber security / data breach risk with 11Cr user data
• Regulatory licensing risk if SEBI tightens payment of order flow rules

Industry outlook

Indian retail participation in capital markets is structurally rising. Demat accounts grew from 4Cr in 2019 to 18Cr in 2025. Per capita equity ownership in India (2.3% of population) remains a fraction of US (55%) — the headroom is massive.

However, the fintech broker space is reaching saturation at the top. The next growth driver must be:

• Deepening wallet share per user (wealth management, insurance, credit)
• Tier 2/3 city expansion
• NRI investing platform

Groww is well-positioned for all three but execution risk is high.

IPOGenie verdict

Subscribe (with caution). Groww is a generational fintech franchise with genuine moat through brand and user habit. The FY2025 profitability inflection is real. However, the F&O revenue concentration and regulatory overhang make this a high-risk, high-reward bet. Size your position accordingly — this is not a "buy maximum lots" situation. Strong long-term hold for investors with 3+ year horizon.

Short-term listing: GMP suggests 25% listing premium. QIB demand will be the key signal on Day 2 of subscription.