The Indian capital market has been growing at a breathtaking pace even amidst rising market volatility and geopolitical woes. Just to shed light on one aspect of the capital markets, let’s take mutual funds. As of 30 June 2026, mutual fund assets stood at Rs 82.22 lakh crore, compared to Rs 33.67 lakh crore five years earlier. Now that’s some solid growth.
The rising number of Demat accounts also tell a similar story. As of June 2026, around 18.59 crore investors had Demat accounts registered with Central Depository Services (India) Ltd. (CDSL), and another 4.56 crore accounts were with National Securities Depository Limited (NSDL).
While all these numbers give an idea of how broad the Indian capital market ecosystem has become in the past few years, in recent times there is only one capital market stock that institutional investors seem attracted to.
During the April-June quarter, foreign institutional investors (FIIs) as well as Domestic institutional investors (DIIs), including mutual funds, bought this stock at an aggressive pace. FIIs increased their stake by 4.38% points, while DIIs raised their stake by 4.16% points, taking the total holding to 6.89% and 10.08%, respectively.
The stock? Billionbrains Garage Ventures Limited, popularly known as Groww.
Let’s explore the rationale behind why the institutions are buying this capital market stock aggressively.
Groww: From A Pure Brokerage Play to a Diversified Wealth and Financial Services Platform
Groww is one of the largest digital investment platforms in India with over 2.2 crore transacting users as of June 2026. The company, which started with offering an easy way to invest in mutual funds, has now diversified to inclide the brokerage segment primarily offering equity derivatives and a margin trading facility (MTF), asset management, wealth management, lending products such as personal loans and loans against properties, and even insurance products.
At the end of June 2026, the total customer assets of the company touched Rs 3.6 lakh crore, growing at 38% YoY. Out of the total, during Q1FY27, net inflow stood at Rs 23,000 crore.
Market Share Improved Across Business Segments
During the first quarter of FY27, Groww’s market share improved across all business segments. For the stocks segment, retail market share increased to 15.1%, up from 11.8% in the corresponding quarter last fiscal.
For the equity derivatives segment, retail market share increased to 11% during Q1FY27 from 7.2% in Q1FY26.
The company also witnessed growth in its mutual funds segment as the market share grew to 14.1% from 12.4%.
Finally, coming to the MTF segment, Groww’s market share surged from 1.2% to 2.7% over a year. The management expects this segment to grow significantly in the near future as MTF penetration in India is still low. They have also indicated that cash yields are improving alongside MTF penetration.
Growing Clientele Amidst Industry Volatility
During the April-June quarter, Groww added 1,15,000 (net) NSE active clients while the overall industry witnessed a net loss of around 2,57,000 clients.
The management has attributed this to better product quality, superior user experience, and customer trust factor.
Improving Revenue Mix
During Q1FY27, revenue of the company stood at Rs 1,473 crore, up from Rs 904 crore in Q1FY26, growing 63% YoY.
While equity derivatives still contribute to more than 50% of the revenue of the company, the overall revenue mix reflects a gradual shift. From 56.4% in Q1FY26, revenue from equity derivatives reduced to 52% in Q1FY27. Similarly, revenue from stocks reduced from 19.3% to 16.4%, while revenue from commodity derivatives increased from 0.2% to 4.9% during the same period. Revenue from the MTF segment also expanded to 8% from 4.7% a year ago.
Improving Revenue Mix
| Segment | Q1 FY26 | Q1 FY27 | Change |
| Equity Derivatives | 56.4% | 52.0% | -4.4 percentage points |
| Stocks | 19.3% | 16.4% | -2.9 pp |
| Commodity Derivatives | 0.2% | 4.9% | +4.7 pp |
| Float Income | 7.2% | 8.1% | +0.9 pp |
| Margin Trading Facility (MTF) | 4.7% | 8.0% | +3.3 pp |
| Personal Loans + Loan Against Securities | 6.2% | 5.5% | -0.7 pp |
| Treasury Income | 4.8% | 3.0% | -1.8 pp |
| Other Income | 1.2% | 2.1% | +0.9 pp |
Double the Profit
In line with the growth in revenues, earnings before interest, tax, depreciation, and amortization (EBITDA) more than doubled from Rs 483 crore in Q1FY26 to Rs 971 crore in Q1FY27, reflecting on the company’s ’ operating efficiencies.
Profit after tax (PAT) increased by 94% YoY from Rs 378 crore to Rs 735 crore during the period.
Groww’s return on equity (ROE) stood at 28.8%, while the industry median was just 11.3%.
Growing profitability and returns are perhaps another reason for FIIs and DIIs increasing their stake in this company.
Management Outlook
The management indicated that during the upcoming years, they will focus on becoming a true wealth management company, with products that help customers through portfolio construction, rebalancing, tax optimisation and investment research rather than simply executing trades.
They also reflected on business from bonds, which is scaling well, and also commented on US stocks being a part of their future product portfolio. This is currently in the testing phase.
Already trading at a premium?
The stock is trading at a price-to-earnings (PE) of 50.2x, which is more than double the industry median of 21x. Even the price-to-book value (PBV) ratio is 12.7x, while the industry median is just 1.9x, reflecting that the stock is relatively overvalued compared to its peers.
6-Month Share Price Movement of Billionbrains Garage Ventures Ltd. (Groww)
Should This Wealth Tech Player Be on Your Watchlist?
Groww’s structural growth story remains compelling with increasing market share across business segments, improving revenue mix beyond equity derivatives, and strong earnings growth with improving profitability. Having said that, whether the conviction of the institutional investors will play out in the future or not only time could tell. So, for now, you can add this stock to your watchlist and keep track of its future performance.
Disclaimer:
We have relied on data from www.Screener.in throughout this article. Only in cases where the data was not available have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.
Maumita Mitra is a seasoned writer specializing in demystifying the world of investment for a broad audience. She has a keen eye for detail and a knack for explaining complex financial concepts in the simplest manner possible.
Disclosure: The writer and her dependents do not hold the stocks discussed in this article.
The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities, or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives and resources, and only after consulting such independent advisors as may be necessary.