As Groww, India’s leading stock trading and wealth-tech platform, gears up for its IPO in November, cofounder and CEO Lalit Keshre said the listing is a natural step toward accountability for a company managing billions in customer wealth. “We make so much money, we could keep it all. But that’s not how you build a 100-year-old company,” Keshre told Pratik Bhakta & Samidha Sharma in an exclusive interaction. Its closest rival Zerodha remains privately held and has never raised external capital.
Groww plans to raise Rs 6,600 crore through a mix of offer for sale (OFS) and primary stock, seeking a valuation of around Rs 62,332 crore ($7 billion). As it enters the public market, Groww faces a new kind of scrutiny — of quarterly earnings and public assessment. Keshre explained the vision behind the decade-old firm, and how he plans to steer it through the regulatory and competitive crosswinds of India’s evolving financial landscape. Edited excerpts:
You’ve been profitable for long and have enough cash. Why go public?
One is brand building. Second is to strengthen our tech infrast-ructure. Third is to scale up the MTF (Margin Trade Funding) book. We launched MTF just around nine months ago, where we were a late entrant. So, a lot of our customers only recently got to Margin Trade Funding. Fourth is LAS (Loans Against Securities) for a lot of our customers who need credit. This will primarily cater to our affluent clientele, those with bigger portfolios.
There is a perception that listed broking firms are not very palatable to retail investors. What do you have to say about that?
If you are managing ‘money’ for millions of people, and that too millions and billions of dollars, you should be accountable to the public. That’s how it is the world over. Your customers become your shareholders. Which means higher accountability, higher responsibility, more trust in the system. Just look at the data across the world. Look at the US all big financial services companies, not just broking firms, are listed.
I can be selfish. Groww makes so much money, we can just keep everything to ourselves. But that’s not how you build a 100-year-old company. Which institution will survive 100 or 200 years? One that is accountable to the public, which is owned by the public.
Will lending be a critical element of Groww’s business?
Groww is primarily an investing and wealth management platform —customers can access credit products like personal loans and loans against securities through a different app. We comply with all regulatory requirements, and have also built the agile ecosystem of a financial services company.
You have spoken about your products being a growth lever for the firm. Can you take us through your product road map?
There are around 18 million investors and then there is the adoption of our products. Stocks plus ETF adoption is around 72%. Mutual funds are about 55% to 60% — which keeps growing year on year. Derivatives are around 9% to 10%. MTF adoption is the smallest, at 1% to 2% now.
Lending will be very, very small, also about 1% to 2%, I think even less than that. Our anchor products are mutual funds and stocks. And then there is wealth management. We have around 3,00,000 ‘afffluent’ customers, which is a fairly large number, and we need to cater to them.
The markets regulator has been cracking down on speculative trading. What kind of impact will that have on Groww’s growth?
Our derivative products have around 9.8% adoption. Among our new users it is even lower, like maybe 4-5%. And those who only do derivatives is like 0.3%. But it’s a very high revenue-generating product.
In order to make our business resilient from day one, our goal was to have multiple products. Now we have 12-13. Even the cash — that is basically stock trading — business is very large now.
With your focus on new business lines, which non-derivative products stand out for you?
MTF is growing very fast because the adoption is just getting started. Credit is doing good. Wealth management, a small component right now, is also growing very fast. We just launched commodities trading. You can say it is a part of derivatives trading, but it’s a slightly different product on a different exchange, with a very different user profile.
We have seen a major impact on stockbrokers because of regulatory action in the last one year. How is Groww managing this?
Between FY25 and FY26, our non-derivative business grew around 42%. There was a lot of commentary in the media about stockbrokers’ revenues being down 40% because of regulatory action, but if you look at Groww, we actually grew in that time. And between Q1FY25 ando Q1FY26 our revenues are down, but 10%, not 40% like others. Why? Because our non-derivative business has been growing very, very fast. Besides, our market share in derivatives is growing.
How do you see the regulations impacting this sector in the longrun?
There have been many regulatory changes from 2016. And every change did one of three things. It led to the growth of the market, built trust in the system, and enhanced customer protection. We have been the primary beneficiary of all these changes. And we see the same now as well. As India grows, capital markets will have to grow.
Any specific regulatory action that has helped?
Digital customer onboarding. If KYC (Know Your Customer), Aadhaar, etc., were not digital, I don’t think we would have been able to open so many accounts.
Is Groww open to more acquisitions in the future? You have done two very important ones already.
It will be very opportunity-based, capability-based. Let’s say we figure out that it will take years to build a certain capability, then we will go the acquisition route. As engineers, we tend to have this bad habit of building everything internally. Our Indiabulls (mutual fund business) acquisition was for the AMC (asset management company) licence and Fisdom was more for its wealth management capabilities.
If we compare Groww to listed brokers, your valuation-to-revenue multiples are much higher. How do you plan to justify this premium as you go to the public for funds?
Valuation is decided by many factors. You compare us with internet companies, because Groww is an internet company. You compare with consumer companies. We are a consumer company as well. And you look at brokers, and so on.
Among peers, you look at their growth rates. You look at their leadership. How big is the brand? You will look at the return on capital employed as well. You look at their margins, scalability, operating leverage, and so on. All these factors go into defining valuation, which the public markets will surely appreciate.
I am not pointing at anybody, but if you are saying you are a tech company but your gross margins are low, then it’s tough.
In your DRHP you’ve mentioned your significant affluent customer base. What plans do you have to monetise this?
This base is growing very fast — roughly twice the rate of the overall platform growth. Many of our early investors have matured into the affluent category, and we’re also attracting new affluent users who see Groww as their primary platform. If the platform is growing at 30%, this base would be growing at about 70%.
What’s unique is our geographical spread we cover 98% of India’s PIN codes, with 80% of customers outside the top six cities.So, while Mumbai and Bengaluru have high penetration, our strongest growth is in states like Uttar Pradesh, Haryana, and the north-east. That is where the financial inclusion is really happening.
About 23% of our customers are women, which I guess would be among the highest in the industry.