How largest stock broking platform Groww's tax bill and loss is a result 'relocating' to India

Bengaluru-based fintech startup Groww has reportedly incurred a significant loss due to its recent shift from a US-based parent entity to an Indian one. According to a report in Economic Times, "Stock broking platform Groww paid Rs 1,340 crore ($160 million) in taxes, as it flipped its parent entity from the US to India in May this year. The tax payout resulted in Groww clocking a net loss of Rs 805 crore for the financial year ending March 31, 2024. At an operational level the fintech reported a profit of Rs 535 crore up from Rs 458 crore in FY23."
Despite this, Groww's operational performance remained strong, with a profit of Rs 535 crore in FY24, up from Rs 458 crore in FY23. Groww’s biggest rival, Zerodha, recorded a net profit of Rs 4,700 crore on revenues of Rs 8,320 crore for FY24, according to chief executive Nithin Kamath.
Founded in 2016 as a mutual fund investment platform, Groww expanded into stock trading in 2020. Last year, it further diversified into consumer lending, payments and asset management through subsidiaries.

Groww's decision to relocate to India aligns with the country's regulatory framework. Local financial regulators prefer companies and their subsidiaries to be based within the country. Additionally, the prospect of an initial public offering plays a crucial role in this move. Other fintech firms like Razorpay and Pine Labs are also considering similar moves.
The company's revenues grew by 119% to Rs 3,145 crore in FY24, driven primarily by its core broking business, which saw a 124% increase. Groww's recent focus on expanding into margin trading and other financial services highlights its efforts to diversify its revenue streams and compete effectively in the Indian market.

In September 2023, Groww overtook Zerodha as the largest broking platform in India with 6.63 million active investors compared to the rival’s 6.48 million. By May 2024, Groww’s active client base surpassed 10 million, making it the first discount broker in India to reach this milestone.