Groww, a stock trading platform, paid Rs 1,340 crore ($160 million) in taxes when it transferred its parent organization from the United States to India in May of this year. Groww's tax payout resulted in a net loss of Rs 805 crore for the fiscal year ending March 31, 2024. On an operational basis, the fintech posted a profit of Rs 535 crore, up from Rs 458 crore in FY23.
The Bengaluru-based business joins Walmart-owned PhonePe, which flipped to India from Singapore in October 2022 and paid billions of dollars in taxes to the Indian government.
Unlike PhonePe, which conducted a share transfer between its Indian and Singapore businesses, Groww combined its US parent with its Indian firm, thereby paying US taxes. Peak XV Partners-backed startup's final valuation was $3 billion in 2021. Since then, the company has not raised a substantial institutional equity round.
Payments Majors Razorpay and Pine Labs, as well as rapid commerce leader Zepto, are preparing to'reverse-flip' to India. According to report, Razorpay is expected to pay $200 million in taxes after its restructuring to migrate from the United States to India is completed.
A primary incentive for fintech firms to shift their domicile is to fit with India's regulatory structure, as local financial regulators prefer that companies and their subsidiaries be headquartered in the country. Furthermore, the possibility of an initial public offering plays an important part in this approach.
Groww announced total revenues of Rs 3,145 crore for the fiscal year ending March 31, 2024, up 119% from Rs 1,435 crore the prior year. Groww's core broking revenue more than doubled in FY24 to Rs 2,899 crore, up from Rs 1,294 crore in FY23, as earlier reported.
Groww, which was founded in 2016 as a mutual fund investment platform, will expand into stock trading in 2020. Last year, it expanded into consumer loans, payments, and asset management via subsidiaries.
On September 26, it was reported that discount brokers such as Groww were progressively entering the market of providing margin-trading facilities in order to diversify their revenue streams, particularly when regulatory scrutiny impacted the core revenue-generating activity of futures and options trading.
Groww's major competitor, Zerodha, reported a net profit of Rs 4,700 crore on revenues of Rs 8,320 crore in FY24, according to CEO Nithin Kamath.
In September 2023, Groww surpassed Zerodha as India's largest broking platform, having 6.63 million active investors to the rival's 6.48 million. Groww's active client base will hit 10 million by May 2024, making it India's first discount broker to do so.
