IPO-bound Groww is set to acquire wealth management startup Fisdom for $150 million in an all-cash deal. The acquisition, coming just before Groww’s confidential IPO filing, will broaden its product portfolio, especially in mutual funds and tax-related services. Backed by GIC with a fresh $150 million funding round, Groww is preparing for its IPO at a $7–8 billion valuation amidst a volatile market. This strategic move aims to diversify revenue and strengthen its position as India’s largest broker by active investors, despite recent industry-wide challenges.
India’s largest brokerage firm by active user base, Groww, has entered into a definitive agreement to acquire wealth management startup Fisdom for $150 million in an all-cash transaction. The deal marks a significant move just weeks before Groww is set to file its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) through the confidential route, signaling the firm’s intent to go public.
Strategic Expansion Pre-IPO
The acquisition of Fisdom is not only aimed at expanding Groww’s product suite but also strengthening its position in the competitive financial services space. This is Groww’s second major acquisition after it acquired Indiabulls Asset Management Company in 2023. Fisdom, founded in 2015 by Anand Dalmia and Subramanya S.V., offers services including mutual funds, stocks, bonds, portfolio management services (PMS), and tax filing. It serves over one million customers across 15 offices in India.
Groww’s acquisition will bring these offerings into its fold, adding a broader set of investment and wealth management solutions to its primarily retail-focused platform. The acquisition also comes as part of a broader strategy to weather market volatility ahead of the IPO.
Fresh Funding Boosts Valuation
Coinciding with the acquisition, Groww has raised $150 million from Singapore’s sovereign wealth fund, GIC, valuing the company at $7 billion post-money. This investment is part of a larger pre-IPO round of $250–300 million, expected to close in the coming weeks. This financial boost will help strengthen Groww’s balance sheet and fund its next phase of growth.
Strong Financial Performance
Groww reported a consolidated revenue of ₹3,145 crore for FY24, more than double from ₹1,435 crore in FY23. Operational profits also saw a year-on-year increase of 17%, reaching ₹535 crore. However, due to a one-time domicile tax of ₹1,340 crore incurred after moving its registered office from Delaware (US) to Bengaluru, the company reported a consolidated net loss of ₹805 crore.
Market Conditions and Challenges
The IPO comes at a time when the Indian broking industry is grappling with regulatory changes and waning investor sentiment. Several large brokers, including Groww and Zerodha, have reported a decline in active investors for consecutive months. Regulatory curbs on retail futures and options trading, potential tax hikes, and reduced exchange incentives are expected to weigh heavily on revenue in FY25.
Despite this challenging environment, Groww appears poised to leverage its robust user base, diversified offerings, and recent acquisitions to stay ahead in the market.
As it gears up for a public listing with a target valuation between $7 and $8 billion, Groww’s acquisition of Fisdom signals confidence in its long-term vision. With increasing competition and regulatory headwinds, the move strategically bolsters its service offerings, especially in wealth management, tax filing, and advisory—segments that could help future-proof the company in a volatile market landscape.
