Daybreak - India’s largest stockbroker, Groww, is banking on the rich to sell its IPO story

Episode Date: September 15, 2025

India’s largest stockbroker, Groww, is chasing an ambitious IPO. But behind the headlines, its core broking business is under stress. Its clients are leaving, regulations are squeezing revenues, and profits are wobbling. To keep its $7–8 billion valuation intact, Groww is making big moves. It's acquiring loss-making wealth-tech startup Fisdom for $150 million and launching “W,” a new unit for the rich. Wealth management is the trend everyone wants in on, but can Groww really pull it off? Or is this just optics ahead of the IPO? Tune in.Compete in India's first and only case competition.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording.

Intermission launches on March 23rd. To get an alert as soon as we release our first episode, please follow Intermission on Spotify and Apple Podcasts or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Open your phone and chances are that you've got the grow app sitting right there maybe tucked away in that folder of money apps that you check once in a while.

It feels simple, it feels friendly, and it is a place where millions of Indians place their very first stock trade. But behind that familiar green logo is the story of a company that is in a rush. For context, Grow is preparing to go public at a valuation of around $9 billion. News reports say that it is all set to file its updated DRHP this week and is looking at a November listing. So it is no wonder that Grow is no longer content with being just, India's largest stockbroker. It is buying a wealth tech startup called FISD for $150 million

and it is building a new unit called W just for the rich. Why? Well, because the world that it thrived in, which was discount broking, is changing fast. Regulations have clamped down on futures and options once the main moneymaker for firms like Groh, Rho, Zerodha and Angel 1. Trading volumes are down, clients are leaving, and in April alone, Groh lost 75,000 users. Zeroda lost 50,000.

The boom seems to be slowing down. And right when Broking feels shaky, wealth management has become the new gold rush. Investors see it as predictable, sticky and long-term. Valuations are richer, multiples are higher, and everybody wants an end. And now Groh is throwing its hat into the ring. But here's the twist.

You see, Gro's $9 billion IPO valuation depends on more than just hype. It depends on convincing the market that it can leap from being the app of choice for first-time traders to a serious player in wealth management, which is a business built around the country's rich and super-rich. So the question is, can Grow really make that jump? Or is this just a flashy pivot before it steps into the harsh spotlight of the public markets? Welcome to Daybreak, a business podcast from the Ken. I'm your host Nick Dha Sharma and I don't chase the new cycle. Instead, every day of the week, my colleague Rachel Vargis and I will bring you one business story that is worth understanding and worth your time.

Today is Tuesday, the 16th of September. Let's start with the business that grow knows best first. Broking. For years, it was a rocket ship. Millions of Indians rushed into the markets and gross share of active clients. sought from just 5% in 2021 to 26% by March 2024. Its app became the entry point for a new generation of investors. But popularity does not always equal profitability.

Most of Gross clients are young first-time investors, and they are not placing massive trades. They are not sticking around when markets get rough. In fact, Groh's average revenue per user in FY 2024 was just under 4,000. Now, compare that with Angel 1, which makes double or Zeroda, which makes triple. And now the real blow, which is regulations. India's market regulator Sebi cracked down on derivatives trading, futures and options. For brokers like Groh, Zeroda and Angel 1, that was their bread and butter.

So when that revenue stream shrank, so did their margins. Trading volumes fell by up to 40%. And the fallout was immediate. Groh started losing clients, tens of thousands of them, and its profits which were already slim, came under pressure. In fact, FY 2025 could have been a great year if not for two setbacks. One, which is a one-time tax hit from shifting its domicile to India, and second, Seby's clampdown on F&O.

And now, the most interesting part. You see, despite all of this, Groh is chasing a number. $9 billion valuation at IPO, and that is aggressive. Some analysts say that it is too aggressive maybe. Let me explain why. You see, gross revenue is way behind its rivals. In FY 2024, it made about $3,000 crore rupees, but Zirhoda made 60% more. Angel 1 made 30% more.

So now you may be wondering, what is driving that sky-high valuation? The answer is optics. growth story, market leadership and not hard numbers. And that brings us back to why grow is so desperate to diversify. Because if it stays just a broker, its IPO story collapses. Investors want something more, something better, something long term. And that is where wealth management enters the picture. For more on this, stay tuned.

If you are a regular listener of Daybreak, you will know how wealth management has become the latest hotcake in India. It is seen as stable, predictable and sticky. Unlike broking, which depends on trades, wealth managers earn by distributing products and managing portfolios. Investors naturally love this model. And the proof is in valuations. Wealth firms like 361 trade at 37 times in earnings. Anandrati wealth over 50 times.

Now compare that with Angel 1 at 23 times. The market clearly thinks wealth is worth. worth more and grow wants in. And this is where fizzdom comes in. It is a small wealth tech startup with over a million users, 150 wealth managers and partnerships with multiple banks. It offers brokerage, mutual funds, portfolio management, the works basically. On paper, it is a perfect fit. But here's the problem. Comparatively, wisdom is tiny and it is losing money. In FY2024, it is a perfect fit. In Fypiret. it posted 57 crore rupees and losses on 84 crore rupees in revenue. Credit agencies even downgraded it, citing continued losses.

So now, at $150 million, Grow is paying more than 15 times of wisdom sales. And that is way higher than what bigger, profitable firms like 361 or Novama wealth are valued at. Analysts are calling this overpaying. And then there is the mismatch. Gross clients are mostly small-ticket retail traders. Wealth management by contrast targets big spenders. Chalkin-ch cheese, as one executive told my colleague the Ken editor, Anand Kalyanaraman. Expecting gross current users to suddenly embrace wealth services seems unrealistic.

So, why even do it then? The answer lies in optics. The acquisition gives Grow a talking point. It makes the company look like a financial supermarket, know, a one-stop shop for investing, lending, insurance and payments. Never mind that most of these verticals are still at their baby stage. The reality is, it will be years before Grow sees real results from wealth, if at all. And that brings us to the core contradiction of the story.

Grow is valued like a wealth giant, but it earns like a discount broker. It has millions of clients, but most of them are not profitable. It is buying startups to project strength, but those startups are loss-making. Meanwhile, its listed peers like Angel 1 are already hurting from Seby's moves. Angel's profits have halved in the March quarter. Its stock fell sharply. And if that is what is happening to establish players, what happens when Grow goes public? The public markets, after all, are ruthless.

Grow has hiked fees. Brokerage, DP charges, margin trading costs. They are trying to squeeze out more. profit. But that only goes so far. Investors like GIC who've already put in $150 million might have their reasons, which is FOMO or fear of missing out. But what about retail investors? They should be careful because at the end of the day, Gro's glossy valuation may not match its true colors. So the big question that we end with today is, is Grow reinventing itself for the future, or is it just putting on a show before the IPO curtain rises?

Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of a subscriber-only offerings and a full subscription offers daily, long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the Ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted and produced by my colleague, Snicktha Sharma, and edited by Rajiv Sien.