Home >Money >Personal Finance >Mutual Fund platform Groww to launch stock broking services

Online mutual fund platform Groww, which was founded by a team of former Flipkart executives, has announced plans to launch stock broking services. The platform was launched in 2017 and has grown to about 5 million users. Initially launched to provide regular plans, it switched to direct plans in mid-2018. Direct plans do not include distributor commissions. The new service is set to be low cost (along the lines set by discount brokerages like Zeroda) rather than a full-service model with broker research.

Lalit Keshre, co-founder and chief executive officer (CEO) of Groww explained how its demographic profile has shifted over time. “A big change came in our business when we launched our app in December 2017. A lot of investors from outside the six largest cities of India signed on to a point where 60% of our users are outside these cities. The median age of our user base has also gone down from 29 to 26 years," he said.

He also dismissed concerns about whether a predominantly mutual fund customer base can be converted to stock investing. “We don't think of people as mutual fund investors as distinct from stock investors. Our goal is to create a universal investing app. Stock investing will also unable our users to buy ETFs. Think of it like the transition in Flipkart or Amazon from books to electronics to almost every item of household consumption," said Keshre.

Keshre also explained the decision to launch the service during a global economic downturn. “Today's economic environment is challenging but we had been working on this for a while and had already laid out a launch roadmap. Also, in the long run timing does not matter. In fact, if people buy stocks now on our platform, they will have a good experience," he said.

Several other online platforms offer direct mutual funds such as Zeroda Coin, Paytm Money and Kuvera. Among these, Zeroda began as a discount online broking house and moved into mutual funds subsequently. Groww’s decision to follow the same course, albeit in the opposite direction underscores the synergies between the two types of intermediation.

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