Half of Groww’s client assets don’t earn a rupee, but here’s why analysts are bullish

Groww is India’s largest broker by active clients (26% market share; the next competitor is at 16%), which is a remarkable outcome for a platform that launched broking only in FY21. However, a significant 50–55% of Groww’s client assets currently generate zero revenue.

This is not a weakness, though, assure analysts, and it is a massive embedded monetisation opportunity for the company via wealth offerings, margin trading facility, advisory, and credit overlays.

Because Groww—in line with the first wave of discount brokers in India—grew its active clients rapidly through a mutual fund-led funnel and app-first distribution, it attracted a massive base of young, first-time investors (whose median age is 25-26) before monetisation was even on the table. In fact, more than 45% of Groww users today are under 30.

Hence, Groww is betting on vintage-driven economics, wherein users who start investing in their mid-20s naturally compound their assets, product usage and ARPU over time, explained Jefferies, a prominent global investment banking and capital markets firm, in a recent note.

Put simply, Groww’s model is built on the theory that a 25-year-old investor who starts with mutual funds will, over time, trade equities, use margin products, seek advice, and eventually borrow against assets. Thus, monetisation is not forced upfront but layered gradually as investor trust deepens and their assets compound.

This is a marked shift from companies chasing instant ARPU (average revenue per user) to growing the customer lifetime value over a 10-15 year period.

Jefferies expects these zero-revenue users to grow their assets by 4-5x over the next three to four years, in turn, contributing to Groww’s revenue jump by 29% by FY28. And as they mature further, these young investors are also expected to present fintech with more cross-sell and upsell opportunities, thus expanding its margins too.

Add to that, affluent users typically deliver 5x higher ARPUs than aspirational users, which also explains why Groww is now pivoting towards wealth management and advisory. Its recent acquisition of Fisdom was a strategic one, giving it instant access to relationship managers, PSU bank distribution, and an AUM-led wealth engine that would have taken several years to build organically.

Jefferies projects that wealth management could become a Rs 6,600+ crore revenue business by FY30, even at just 10% penetration of Groww’s client assets. Additionally, it expects new business to bring in 20% of the company’s revenues by FY28, up from a mere 1% in FY25.

“The company has launched a margin trading facility (MTF) and expanded into commodities, bonds, wealth management and loans against securities. This allows Groww to cross-sell to MF-only clients (~50% of assets) where it earns no revenue. We estimate new business could contribute 20% of FY28e revenues led by MTF & wealth,” the brokerage stated in its note.

Fuelled by bullish analyst expectations, Groww shares rallied on the BSE on Friday, ending 12.34% higher at Rs 161.89.

The Robinhood playbook

Groww’s expansion into new categories beyond traditional broking mirrors the global Robinhood playbook, according to Jefferies, but adapted to Indian regulation and user behaviour. The company is acutely aware that India’s next phase of fintech growth will not come from cheaper brokerage or free UPI, but from cross-selling financial needs across life stages of the customer.

India’s discount broking wars are effectively over. Pricing power has vanished as a differentiator. What replaces it is ‘product velocity’, which is the ability to continuously launch, integrate, and scale new financial products without breaking the user experience.

Interestingly, even before Groww’s newer products have meaningfully scaled, its margins outpace several peers (Angel One, Zerodha), with further operating leverage expected. However, more services bring in more complexity and, in India, more regulation.

‘Product velocity’ sounds compelling, but broking, wealth management, margin funding, and lending are not just adjacent businesses—they are operationally different and overseen by separate regulators. Many financial institutions have stumbled in the past not because their products were wrong, but because integration diluted their focus and accountability.

If users began to associate Groww with complexity rather than clarity and ease of use, the very advantage that powered its early growth could erode. Hence, it is imperative for India’s largest broker to stay true to its fundamentals, one that made it a nearly 1-lakh crore public company in less than a decade.