Groww Expands Lead in Stock Brokerage, Adds 3.5 Lakh Users in October

In October 2024, Groww continued to strengthen its position as India's leading online stock brokerage platform, adding approximately 3.5 lakh new traders, according to data from the National Stock Exchange (NSE). This marked another strong month for the company, which has now amassed a user base of about 1.25 crore active traders, nearly double its user count from just a year ago. In contrast, its closest rival, Zerodha, added a modest 15 lakh users over the same period, increasing its total active user base to 80 lakh and leaving a notable 45-lakh gap between the two.

Groww’s rapid growth comes during a month that witnessed the sharpest market decline since March 2020, with the equity markets dropping by over 6%. Despite this challenging environment, which typically dampens new user acquisition, Groww maintained its momentum, highlighting its strong appeal among retail investors, particularly younger users who are increasingly favouring digital-first wealth management platforms.

As of the latest figures, Groww has consistently outpaced other major brokerage firms in user acquisition rates, adding an average of 5 lakh users per month. Meanwhile, Zerodha’s monthly additions stand at around 1.25 lakh users, a stark difference that reflects Groww's appeal in attracting new traders. Angel One, currently the third-largest player, has also shown notable growth, with around 25 lakh new customers added over the past year, equating to an average of 2.5 lakh users per month. With this rate, Angel One is now within reach of Zerodha’s second-place spot, needing only 5 lakh additional users to overtake it.

The October results reveal a continued interest in stock trading platforms among new investors, even amidst a period of heightened market volatility. New-age investors appear undeterred by temporary market dips, as illustrated by the sustained growth in user sign-ups. Groww's emphasis on providing an intuitive, accessible platform has evidently resonated with this audience, enabling it to capitalize on the increasing trend of retail investing in India.

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In the broader brokerage landscape, Upstox, which holds the fourth-largest user base, also reported growth. Its active investor base rose from 21.5 lakh in the previous year to 28.5 lakh in October 2024, underscoring a gradual yet steady rise in popularity. Dhan, a newer entrant that recently replaced Paytm Money in the top 10 list of brokers, added over 50,000 investors in October, marking the highest user addition among smaller players.

While Groww has now taken a significant lead in terms of user numbers, Zerodha continues to hold an advantage in revenue generation. For FY24, Zerodha reported revenue of Rs 8,320 crore, while Groww’s revenue stood at Rs 2,900 crore. The revenue disparity underscores the differences in monetization strategies between the two platforms. Zerodha, which has built a more mature user base over the years, benefits from a loyal customer base that engages in higher-value transactions. Groww’s revenue generation, however, is anticipated to grow as its user base matures and its offerings expand.

Looking ahead, broking firms are bracing for several regulatory and tax-related challenges that may impact growth. Upcoming government policies could impose higher taxes on trading, reduce exchange rebates, and potentially restrict retail trading in futures and options. These changes may reduce brokerage revenues by 30-50% in the coming quarters. For Groww and other emerging brokers, balancing aggressive user acquisition with long-term profitability will be key as they navigate the evolving regulatory landscape.

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Despite these challenges, the appetite for retail investing in India shows no sign of waning. As of the latest data, the country has over 160 million demat accounts, although the number of active investors engaging in transactions remains around 50 million. Platforms like Groww have leveraged this growth, benefiting from an increased interest in personal finance and stock trading. The firm's digital-first, user-friendly approach has resonated well with a new generation of investors, enabling it to surge ahead of traditional players in terms of user numbers. Whether Groww can sustain this growth trajectory while managing profitability pressures will be a key focus for industry observers in the months ahead.

[Disclaimer: This article is based on recent user growth data for stock brokerage firms in India. Actual user metrics may vary with updated reports.]