Groww's Ishan Bansal on company’s future, growth strategy and valuation outlook

It was a moment of pride and optimism as Groww made a strong debut on the stock exchanges. Groww's Co-founder Ishan Bansal shared his thoughts on the company’s future, growth strategy, and valuation outlook in an exclusive conversation with ET Now following the listing.

“First of all, thank you so much. This is a very special day for us. Today, a lot of our customers would have become our shareholders, I think that is also a lot of exciting part and we are very happy that it opened on a positive note and hopefully, it will close also at a positive note, and people will end up making money,” Bansal said.

“According to us, this is again just one day, but we think from a long-term perspective we want to keep on compounding, we want to keep on adding more and more customers, more and more products, and keep on investing in technology and branding and build something which is like timeless in some ways and that is the end goal for us.”

Speaking on the company’s roadmap ahead, Bansal said that the immediate focus will be on releasing Q2 results before outlining the next steps. “In general, our focus is always same — keep on adding more customers, because we think still India is super underpenetrated from a customer perspective. When we started, there were just 50 lakh customers who were in capital market. Today, there are roughly 5 crores, but still 5 crores is a much smaller number compared to our population. We can help in penetrating the country. We today are in 98% of India's pin codes and we can further extend that as well,” he said.

On scalability and capacity, Bansal explained that Groww has significantly upgraded its infrastructure after facing downtime during the election period last year. “We actually invested heavily in building extra capacity not only just to kind of solve for those incidents, but also to solve for our growth. So today, we operate at like 20-25% of the capacity compared to market where we can easily go 3x-4x from here as well,” he said.

Responding to concerns over valuations, Bansal maintained that the company’s value has always been fairly determined by the market. “Valuation according to us have been always fair. It is always in the investor's hand who decides that valuation. The way we look at is we have been a high growth company delivering one of the highest profitability as well and at the same time there is lot of opportunity left in the market and we will keep on growing,” he explained.

On profitability outlook, Bansal assured investors that the company’s strong run rate would continue. “Our profitability in Q1 also was very good and similarly, except FY24 when there was a negative PAT because of the one-offs due to our merger with our US entity, beyond that we have been very profitable from day one actually. We have been very conservative in kind of spending money and that has helped in delivering very high leverage,” he said.

Bansal identified margin trade funding, commodities, and wealth management as key growth levers for the coming quarters. “One of them is margin trade funding which we launched like almost 12 months back now and has already started delivering 3% to 4% of our revenue and it will keep on expanding. We are still at a 1-1.5% of the overall market and our fair share is more closer to like 12-13%. So, we see that it can go easily 10x from here,” he said, adding that recently launched commodities and the Fisdom acquisition under the wealth business would also contribute significantly to revenue.

Discussing the impact of potential regulatory changes in derivatives, Bansal said the company is well prepared. “Our business has been significantly more resilient compared to the competitors. So, if you look at our Q1 numbers that has impact of the last regulation that came in and our revenue dipped only by 10%. Because our ex-derivatives revenue was growing much faster which helped and going forward it will help even further,” he explained.

With a strong listing, steady profitability, and a focus on expanding customer reach, Groww’s management appears confident about sustaining its growth momentum and building a “timeless” business that continues to evolve with India’s expanding investor base.