![](\"\/\/im.rediff.com\/money\/2023\/oct\/13groww1.jpg?w=670&h=900\")
<\/p>\nNextbillion Technology (Groww), the venture capital-backed broking platform, has dislodged Zerodha Broking as India’s largest brokerage in terms of number of active clients.<\/p>\n
Groww had 6.63 million active clients at the end of September, as against Zerodha’s 6.48 million, ending the latter’s long run at the top.<\/p>\n
AngelOne and RKSV Securities (Upstox) were ranked third and fourth with 4.86 million and 2.19 million active clients, according to data available on the National Stock Exchange (NSE).<\/p>\n
At the end of August, Zerodha and Groww had 6.32 million and 5.99 million active investors, respectively.<\/p>\n
A record number of IPOs and strong momentum in the secondary market led to an addition of over 3 million demat accounts for a second straight month in September.<\/p>\n
Close to 6.2 million demat accounts were added in the past two months, taking the total to 130 million — about 10 per cent of the country’s population.<\/p>\n
However, the NSE had only 33.4 million active clients (those who trade at least once during a 12-month period) at the end of September.<\/p>\n
Groww’s share in the total active NSE clientele was about 19.9 per cent, while Zerodha was closely behind with 19.4 per cent share.<\/p>\n
Lalit Keshre, founder and CEO, Groww, said customers’ trust in a “young company” and the digital public infrastructure had contributed to its ascent to the top.<\/p>\n
“There is a long way to go. We will strive to build a sustainable and enduring business in the long term, and we are just getting started,” he wrote on X, formerly Twitter.<\/p>\n
Despite losing top spot, Zerodha remains the country’s most profitable brokerage by far. In FY23, Zerodha clocked a net profit of Rs 2,907 crore on revenues of Rs 6,875 crore.<\/p>\n
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Zerodha’s margins (profit before tax or PBT\/revenue), if one excludes the pass-through exchange transaction charges, are a staggering 70 per cent.<\/p>\n
Groww had seen its top line zoom three times to Rs 1,294 crore in FY23.<\/p>\n
This helped the company swing to a profit of Rs 73 crore from a loss of Rs 239 crore in FY22.<\/p>\n
The move by the government and regulator to onboard new clients through e-KYC has given a fillip to the broking industry. Also, mobility restrictions, shift to the work-from-home set-up, increase in mobile and data penetration, and a drop in brokerage rates too have contributed to the industry’s success.<\/p>\n
After the Covid-19 pandemic, the demat tally has grown more than threefold.<\/p>\n
To corner these new investors, most brokerages deployed aggressive strategies. During the account opening boom of 2021-22, many brokerages spent up to Rs 2,000 per investor to onboard them.<\/p>\n
However, the move doesn’t always yield results as many clients just open a trading account but execute barely any trades.<\/p>\n
Zerodha, which pioneered the era of discount broking, largely refrains from such aggressive strategies, helping protect its bottom line.<\/p>\n
“We continue to be the only broker in the country to charge an account opening fee… Collecting an account opening fee right at the start also, in a way, helps set this expectation with a potential customer, filtering out users who may not be serious about trading or investing with us,” said the company in a blog post last month.<\/p>\n
According to Groww’s website, for the brokerage, trading and demat opening and maintenance charges remain zero.<\/p>\n
Zerodha, on the other hand, charges Rs 200 for online account opening. It also charges for value-added services.<\/p>\n
The charges for intra-day and F&O trades for both top players are largely similar at Rs 20 per executed order.<\/p>\n