This is expected to comprise 5-8% of Groww’s broking revenues. Brokerage firms across the industry typically earn less than 10% of their revenues from commodities trading.
In a post on LinkedIn, cofounder Harsh Jain said that commodities trading, which allows retail investors to trade in gold, silver, and other commodities on the platform, had been one of the most requested features by users. However, he urged new investors to exercise caution, noting that prices of precious metals such as gold and silver can be volatile.
“Sharp upswings are often followed by quick corrections,” Jain wrote. He suggested that users looking to build exposure to metals could instead consider using Groww’s systematic investment plans to invest in gold or silver exchange-traded funds (ETFs), calling it “a disciplined way to build your holdings over time, leveraging the power of cost averaging.”
Groww’s main competitor Zerodha already offers commodities trading on its platform.
Gold and silver prices have been increasingly volatile this year, driven by global policy uncertainty and safe-haven demand amid ongoing trade tensions.
On the Multi Commodity Exchange (MCX), 10-gram gold futures were trading at Rs 1,27,901 as of 5:05 pm on Monday, up from the previous close of Rs 1,27,008 on Friday, while silver futures of 1 kg stood at Rs 1,54,642, down from Rs 1,56,604.
IPO-bound Groww’s foray into commodities trading follows a series of recent product launches, including corporate bonds, margin trading, its wealth management platform W, and 915, a platform for professional traders.
Groww, the largest brokerage in India by the number of active NSE clients, has been focussed on expanding into multiple asset classes to grow its affluent user base and upsell multiple products to customers. This comes amid increased pressure on profitability in the stockbroking industry following a regulatory clampdown on F&O trades.
According to its updated Draft Red Herring Prospectus (UDRHP) filed last month, Groww’s revenue from the primary broking business fell to 93% of the topline in the June quarter from 95.6% in the year earlier. In the same period, income from its non-banking finance unit Groww Creditserv Technology increased to 5.8% from 3.5%.
The company’s operating revenue in the June quarter dropped 9.6% to Rs 904 crore from Rs 1,000 crore a year ago. Profit after tax for the quarter was at Rs 378 crore, up 12% from the same period last year.
Groww classifies consumers with assets of less than Rs 25 lakh as aspirational, while those above this threshold are considered affluent. As of June, affluent users contributed around 33% to the platform’s total assets under management of Rs 26,000 crore, up from 31% in March and 20% in FY23.
The company is expected to list on Indian bourses later this year.