Groww beat every odd to get here. What beats it next?

There is one company in India that has done something that no consumer internet company has managed to do in the last decade. It's a company that started with basically four engineers, a Bengaluru apartment and a very simple thesis about why Indians invest or don't invest. And in the process, that company became the largest stock broker in India. 83% of gross customers today come in without the company spending a single rupee to acquire them. Grow is a very interesting and I would argue a underappreciated kind of a company. It's about 1500 people. It reaches 98% of India's pin codes and 81% of its users are outside the top six metros. It has a DAU by MAU ratio of 56%, which is the kind of an engagement number that you would expect from some kind of a social media app. It's not that you would expect from a financial services platform. And more importantly, grow turned profitable in FY 2023. And last year in the year ending 2025, it made close to 4,000 crores in revenue and 1,800 crores in net profit. A couple of years back, it also made another decision. It made the decision to move its holding company from Delaware back to India and paid the princely sum of 1,300 crores as a one time tax bill to do it. And then in number 2025, at almost the perfect time possible, it listed on the Indian Stock Exchange at an IPO that was subscribed at 17 times over. If you go back and trace all of those decisions, the decision to build and to create a zero commission platform in 2017, the decision to go directly when banks were the ones who were controlling all the financial services. The decision to go and do a reverse flip when most founders and starters were going abroad. And the new and latest decisions to go into mutual fund distribution and FNO lending, margin trade and payments. And we'll talk about payments as well. Maybe one of those decisions looked like it was going against the grain, but when you look back at them today, they seem so obvious in retrospect. And that is why I think growth is actually a great company that hasn't quite got its due. It's not got its due from the press. It's not got its due from the market. In fact, I would argue that it's not valued as highly as it should. It's even not got its due from the ecosystem, which does not really see grow as a company that is a powerful super app that India is probably going to see going forward. It has started to create the infrastructure that every Indian's financial journey touches. And the reason I'm doing today's episode is because I came in with this prior. I came in with this idea that grow is one of the most consequential and important Indian companies of the last decade. And it has made much better decisions under all of this uncertainty and the fog than any other company that exists today. And right now at this point when we know what the equity markets look like, we know when Sebi is tightening the rules that it operates under, we know that competitors like geo financial services and black rock and all of these other players are jumping into either stock brokerage or mutual funds. Also, a set of gaming companies like DreamLeaven have started to come into stockpropking as well. With all of this happening right now, grow is at its strongest position ever. Now in order to test and to challenge this belief of mine, I have decided to get in two guests and these are the two guests who are going to come in and tell me, what am I missing? What is it that I am overindexing on? And what's wrong with this story that I'm trying to tell today? And my first guest is Anand. Anand Kalyar Raman, as long time listeners and subscribers of the Ken, know is the finance editor of the Ken who is well known for writing so many investigative stories about finance and markets, but he has also been writing about grow very, very consistently over the last one year. Welcome Anand. Hey, Pervine, thank you. Anand, come on. Do you agree with me? Grow is such an amazing company, such an exceptional business model. It is a great company, yes. And I would want to add that it's FI26 numbers are also out. You quoted FI25 numbers, FI26. Again, it has increased its revenue by, I would reckon about 15, 20% and the profit has also grown by about say 20% or so. So its profit is 2000 or no, okay, 2000 or close now. And I disagree with you, Pervine, is whether it's M-CAP, that's its market cap. Market cap is still low. I would think that that may not necessarily be the perspective that I come from. I think that from its IPO price of 100, which itself was quite high is what I felt, the stock kind of doubled almost double since then. And only over the last week has been falling now. If you look at the valuation metrics, the P ratio of grow, even after this fall now is about 56 times, while other brokers in the country, they quote at 30 or under 30 times. So grow has actually positioned itself really well. Of course, the market assigns it a premium for its leadership position and it can be the biggest stockbroker in the country. All that is right, but there are other aspects also which help grow, get that kind of valuation. But I would think that after this kind of a run up, maybe the valuation is on the highest side. I don't really agree with you, let us on the lower side there. Which brings me to my second guest, Avinash. Avinash Lutriya is the founder of fiduciaries. Now the reason I have Avinash on this podcast is because Avinash has been talking and poking holes and writing about entrenched incentive structures for seven years and he basically puts his money where his mouth is. And I ask him to explain why. Now he is the first of eight SEBI RIS which is research investment advisors who genuinely specialize in this thing called hourly fee financial planning. He has 24 years of experience. He has 12 years of experience as a senior private equity and venture capital investor. And we did an event at the Ken on wealth last year at the Bengaluru International Center on how basically the next 10 years of wealth and he was one of the panelists that he made some fantastic points. Welcome Avinash. Hi, Praveen and Arun. Avinash, I know that as your position as a SEBI RIA, of course you have certain constraints and bounds on talking about individual companies and stocks. But to be clear, don't worry, we will leave Arun to do all of those wonderful conversations about whether growth is overvalued, undervalued as a stock price, etc. We will come there. But before that, I just wanted to ask you if you can just tell our list us about fiduciaries and what is this hourly fee planning? You are one of eight SEBI people. Tell us about that. So SEBI created the concept of SEBI registered investment advisors in 2013 and SEBI allows SEBI registered investment advisors charge of fee. They only supposed to own a fee from the client. They allow to charge a fee from the client in two ways, either a fixed fee or a percentage of the client's assets under advice or assets under management. I'm in the set of people who charge only a fixed fee and I go one step beyond that saying I only charge a fixed fee. Plus, I disclose how many hours of effort I put in. So you get a time sheet saying I put in X number of hours and I spent this much of time on each day. That's essentially what an hourly fee for an entrepreneur. I happen to engage mostly with very knowledgeable clients and a lot of them are high net worth individuals. That's essentially what I do. So instead of taking a cut or can I use the word commission, instead of taking a commission out of whatever is being invested, you basically give a, it's almost like a subscription, isn't it, Amir? Yes, it's very much like that. The one small difference in my case is clients come back sometimes after a gap of 34 they don't necessarily a new all the time. It's like a bit like you go to a doctor when you have a problem, then you disappear when you're healthy and then you come back again when you have a problem, something like that. Avinash, the reason why I wanted you in this episode is because of it was something that we're on and then I were disagreeing on on well-grows' valuation. I'm not going to ask you to comment on gross valuation and peer issue and all of those things, but I wanted to basically bring you on because I think one of the things the stories that grow is basically saying is the reason the way how we are going to see ourselves in the future and how we are going to grow is by getting into all of these other set of products like say, insurance, wealth management, multiple products. We'll get into all of those things, but it's origin and it started off as this platform where you could do just direct mutual fund investments. So without getting into the stock price of it, I think I just wanted to ask you as a company, which of you won grow? So I think I'm just obsessed with seeing it as RIA and as a advisor to clients. So very often I'll add up wearing that hat rather than the hat of looking at the company as a stock price or how well the company is doing and I think Arun's better to cover that bit of how the company is doing. So where I see it is, there was a podcast episode that came with one of the founders of Grow and there was a point made in it about. Yeah, it was with Lalith. Yeah. There was a point made in it about delayed monetization. Now delayed monetization can have two different ways very simplistically. One is the Uber approach where you start with a very low fee and then later start increasing the price that you ask people get used to the concept in a rough sense of the work. The second way is by cross selling various other services. So I guess in a sense, this second way was really maybe inevitable that Grow would have to get into all these different aspects. And when I look at it as someone advising clients, many of my clients do use a broker, some of them do use a broker to make their mutual fund investments for various reasons. But I see it as there's some parts of that which they can do through a broker which is buying mutual funds or buying exchange-shaded funds ETFs which are useful. And then there are a lot of other things that come in the package that I don't really want my clients to use like trading, like stock trading, option trading or all of those kind of things. So I see it as there's certain amount of positive platform brings a certain amount of negative and there's a net effect and it's possible to focus on each of these things separately. But I tend to focus a little more on the net effect of it. And the net effect affects different clients in different ways. Some clients are very smart and say I'll only use the positive aspects. But on the average, a lot of clients also do use a negative aspects of any platform and that worries me a little bit. Okay. All right. Anand, jump in. I think we should start by basically talking about the I don't want to say history but it's almost like the beginning of growth. You know, when I was like researching for today's episode, actually, by the way, Avina Shastan as much research as I have because he's clearly gone and read or listened to Lullits interview on first, which we link in the show notes with Rohin, which also I read. So I think the question that I have Anand for you is that when you started tracking growth, like I imagined like 2020, 2021, 2022. What was the, yeah, 2022 around that time? What is the, what is the conversation and what was the basic conflicts and the stories that you were writing back then compared to what it is right now? What really, I think it struck me at that point in time was the valuation it commanded. It was even at that point in time, its valuation was about three billion dollars, which was higher than most of the brokers and almost a part with Erotha. The problem there was while it was becoming big in terms of active customers, its market share was rapidly growing, maybe it was the largest even at that point in time. Its revenue and profit was far lower than that was Erotha and also a lot of others. Because its customer base was largely the young crowd and it had, they required millions of customers, but the R2, the average revenue that they earned from Erotha customers was very, very low. So at that point itself, it was attempting to get into various other businesses. It had probably started, you know, it's it's, you know, approached to lending at that point in time itself. The MTF was incipient rent, margin funding was incipient rent, but it was also doing other lending. So and it tried also to, sorry, just for our, sorry, just for our listeners, MTF is essentially margin, how do you, what is it stand for? Margin trade, margin trading facility. Margin trading facility. So in very simplistic terms, it is that it is the ability of a platformer or broker to extend the loan to a consumer in order to buy stock in shares. Yes. Okay, please cut to you. And it was also, also into other lending, unsecured lending, it has started that. It had acquired an AMC in devil. So it was getting into the AMC business. So grow a long time back had probably realized that just being a stock broker will not be enough because it had to actually justify its very high valuation at that point itself. So it had begun to, to become a super rap kind of thing even earlier and that it has accelerated in the run up to the IPO. So last year or the year before that, it had acquired this wealth management company called Fistim and it has also, also started its own wealth management term called W and then actually Fistim will be integrated into W. So it has actually positioned itself as over and above a broker. It's not only a broker, that's its positioning. And if you look at its IPO document, among the competitors it had actually spoken about were actually the wealth managers and MF distributors, even MF distributors who offered regular plans. This company was offering only direct plans. So these competitors from other industries were getting valuations which were far higher than that of brokers. As I explained, the angel ones of the world to get under 30 times per ratio, why the wealth managers would go up to 50 or even more. So when it listed, it was at a significant level. It's a valuation was significantly more and after the listing, it has again rallied a lot. So how its PE is about 60 times or so. So it is more than even the wealth managers and all the other competitors in the industry. By the way, Anand, I was also saying that while I was researching for this episode, I've stumbled upon your story and your story back from 28th of May 2025. So it's almost exactly a year ago and the headline is, "Gro's IPO pitch, Colin, we are more than a discount broker. Investors, Colin really show us." This was essentially a story that you published back then where you said that at that point in time and I quote you, "For starters, this isn't a great time to be a broker in India. The regulatory squeeze on futures and options trading, the main stay for discount brokers like Grow, Zeroda and Angel 1 has hit them hard. This combined with a weakness in the market resulted in a broker's traders volume falling by up to 40%. Companies bled, enthusiasm made way for concern. Many of them have been losing active clients for months now. Just in April, Grow lost nearly 75,000 of them. Zeroda's dropped by 50,000. Essentially, the broker business is no longer as lucrative as it was a year ago, said an analyst tracking the space. That aside, the company also has to fight a perception challenge." End quote. Now, of course, there are stories about whether it is about aggression, whether it is about can it diversify, etc. But I think it's fair to say that one year from that point in time, if you just look at whatever is happening with investors, it looks like Grow has sort of told some narrative and has told some story that investors are like, "Okay, we are bought into this." And the market has accepted it for the moment. That's yes. Okay. Interestingly, if you look at the stock price over the last week, it's been falling. And the reason it's been falling is because the lock-in period for the early investors, the VC has ended and they are exiting in a big way. So from over two, over two hundred and five to one hundred and all rupees, it's at 118 now. So the stock has actually fallen sharply. So, and that's also because this sale was at a discount to the CMP, the market price now. That's one reason it's falling. But the fact of the matter is, early investors in the company have made a lot of money or just on the IPO. but also on the Rally after the IPO. It's almost 100% of the IPO price. - You got it. I mean, I wish I were to pull you in because I feel like one of the general, you know, the rocket fuel that grow has gone on for whatever growth, whether you talk in terms of stock price or revenues or profits, whatever you want to call it. It seems like it was number one. Model one was it was a direct mutual fund. So, or a direct platform where you can buy direct mutual funds. Now, just to be very clear to our listeners what that means is that if you are someone who wants to go and buy mutual funds, there are two ways to do it. There is direct and regular. Avina, you can like tell us a bit about that. Grow was a direct mutual fund. So, as I said, it was a platform where you could buy direct mutual funds. And it got to a certain point with that. And now it is adding on all these other things that are uninset, which is wealth management, insurance, lending, etc. I just want you to tell us the story from a business model standpoint. Because I feel like that's really the heart of what you do and what you understand. So, well, what exactly changes when you try to tack on all these multiple business models? But very broadly, how does this work? Okay. So, an important part of investing, let me just start with that. That even sophisticated investors sometimes don't realize is that the fee that you pay on your investments in various forms, there are various forms of fees, a 1% fee in some form or the other. Over two years, the mind tells you it's just 1%. There's a bug in the mind just tells you, okay, 1%. But over two years, it's 1% actually, which is 2%. Over three years, it's 1% plus 1%, it's 1%, it's 1%, it's 1%, it's 10%. And over 30 years, very roughly, it's close to 30%, not exactly, but close to 30%. That is a core part of investing that many people don't realize that you have, that the fees just add up over time. Once, and that kind of is a big part of any business model in financial services. The clients don't understand this, the businesses understand this. So, almost all businesses in financial services are based on this idea that can I get a little bit of your fee, a little bit of fee from you every year? The client thinks it's a small amount, but it's adding up over the years. When you look at this from a stock-broken point of view, let's just start with just the core business, the stock-broken, it does. Just many large number of trades that a person would do in being a trader, not a long-term investor, those little bit of fees add up. In FNO, you see them doing more and more of that, so the little bit of fees add up. So, just from the core business itself, those fees start adding up. So, for example, if you did many trades in a year, the fees can finally land up to quite a big amount. Now, just take this to another line of, I'll just use one illustration. Use the margin-trading facility, the MTF that we spoke about a little while back. As one cross-selling opportunity for any broker, I did a quick back-of-armul of calculation of how. I mean, this is just a back-of-armul of calculation. The typical coated rate for some of these brokers is 15%. If you were to actually correctly analyze it, it comes to about 16%, 1%, 6%. Just 15, 16%, there's some mathematical nuance to it. If you do a quick back-of-armul of calculation on the nifty 50, since it's inception, including dividends, it gave a return of 12.5%. Forget putting it on Excel sheet. If you just did it on the back-of-armul of, if you're earning 12.5%, and you're paying 16% interest, some of these multiples on this leverage on the margin-trading facilities, you put in 25 rupees, you can buy 100 rupees worth of shares, or in this case, just imagine the index, the nifty 50. Your entire gain is wiped out. So essentially think of it as all the gains of the nifty 50, or since mid-90s is wiped out just because you used margin-trading. I know that's not how people are meant to use margin-trading and how they're using it. Or the broker will say, "No, no, no, no, don't do it that way." Just the return goes down from 12.5% to 0%. Just because of the very high interest rate that you're paying. Who's on the other side of it? It's the broker earning the return. The market rate on that almost risk-free loan, if you look at the futures market, is about a 6% rate of interest. But the investor is paying 16%. And essentially it will wipe out all their returns over a normal market. So essentially one more step back. There was this book and an article in the New York Times written by a person who quit Goldman Sachs a long time back. I don't remember when, but more than a decade back. And he wrote about how his colleagues at Goldman were referring to the CFOs of companies that they did business with the CFOs, chief financial officers, as Muppets. And the British term, "Muppet," they are meant fools, essentially. So for the Wall Street, the CFOs are fools. So for the brokers, all these retail investors are really fools. I mean, in terms of level of knowledge difference. So essentially it's a system where a bunch of smart guys is ripping off a bunch of fools. That's essentially what the situation is. Okay. Very nice. Very, very, very strident and very harsh, I would argue. But still, I'm going to ask this next thing, which is on. If you just take, I'm just going to go back to grow when it was just a direct mutual fund platform. Where at that point at time you tell investors, just come and buy. And the pitch is very simple to potential investors and customers. Because all you're doing is, "Look, you're going to get the best possible rate." I mean, I just point about, you know, the fees killing it is well made. So at that point in time, how would grow make money? Or did they always have some of these other ad-in features right from the beginning? I would imagine that they made money through like subscriptions or through some kind of cross-selling. Did they do any of that in the beginning or did this was something that came later? So the way I look at it as long as it was a platform offering only mutual funds on a direct route. Which means it would allow its clients, its millions of customers who might gather to invest in other mutual funds on its platform and would not be actually charging fee for that. That was a customer acquisition mechanism for it. That's how, and from what I hear in his early days, it also used to offer small incentives and things like that, by which it was able to garner a lot of customers. So it was a customer acquisition mechanism, a tool. Once that happened and it gained a lot of customers like that, then it went into the business of brokerage. And there it started small. So where it was a low cost broker, where the fee it would charge was far lower than what the other brokers in the industry were charging, maybe except Sarodha. So there are a lot of young customers and it was offering these educational videos and all that. By which it was able to get a lot of customers, then it slowly got into brokerage. And it was able to grow that base extremely fast. And when the pandemic hit, that became a rocket. So it had a lot of customers at the point in time, which got into the business of F&O. F&O also really picked up in a very, very big way in the pandemic. That's where the money actually entered the company in a very big way, the product, like the revenues and the profits take. But of course it was still small because its customers were these people were not as sophisticated as I could say. They were people who were young and their output was low. But the number of customers, it became a volume game for it. The number of customers became very large, it became the largest broker in the country and was able to grow. Maybe it had foresight at that point itself to realize that F&O would wonder if it is a face a reckoning that the regulator would be after it, after this entire business. But as a regulator has itself said, is akin to gambling in a sense, if it's not hygiene for a real risk. People are betting for one week, for one month, and for zero day and all that. So then it got into other businesses also. But even now it's a broken business, which is its largest. After booking it is because of the crackdown and broke on the broken business. It's also increasing the sent-off business in a big way. I think in 2020, I remember reading, I was just opening up my notes. In 2025, 85% of its F5/25 revenue came from a broker and the majority of that for growth came from F&O. But what has happened now in Q1, which is the latest result that's what you just mentioned. That is already fallen. So I think their share of revenue from F&O to their credit has been coming down. came down in the last couple of quarters and that's something that I think investors are also quite happy about. Is that fair? It's been able to retain it largely. If you compare it with the earlier quarter but if you compare it with last year, it has actually kind of fallen. Increasing it's kind of shared in the revenue mix is MTF now. From the story that Akriti had written in April, MTF's shared in the revenue has increased to about 7% now. Earlier it was under 2% of revenue. That's an increasing. I would imagine that one way, the really cynical way to think about it is that FNO is one part of it which kind of like, as you say, in Sabi's words, they alluded it to gambling. MTF, again, as Avinaj basically did is back of the envelope calculations, is it as risky as bad or as precarious? Is that the best word? Is it as precarious as the earlier FNO? Is it something that you think is better in some way? Avinaj views on this are very clear. So I'm just wondering, Avinaj, if you're unless you're anything else to add on to that. So if you ask me, MTF is also a way of gambling where till we get to the beds of for the short term, see, it's not illegal, it's not wrong. People take all kinds of beds, okay. We don't have to take a position here. That's very very much getting put a model in all here. But yeah, I mean, if those are the beds that people want to take, people would take those kind of beds. One could argue, that's the argument that was made even in FNO. Eventually it became so big and retail, post-losing so much money that a regulator had to step in. And the question is, will that happen in MTF eventually? These are early days now. MTF is increasing. The numbers are rising. If this becomes way too big and retail investors start to lose a lot of money here, I reckon that the regulator will also end this space and will impose curves and restrictions here. Cool. I want to just chain tracks and I want to talk about something that Ravindhush Rautapurge which is about delayed monetization. Now, this is actually, I'm going back to the first principles episode that Lalith Keshe was the co-founder and CEO of Grow, had with Rohin. And I'm just going to quote at this point in time in this conversation, he's basically talking about what are the basic things about Grow that get them to what they do, right? And here it is, quote. And these kind of things, the way we abstract it. So profits are important for the business, but there are a few things which I'll tell you which makes us think very long term. So as I said, wealth will continue growing. But in general, if you take of care of a few things and you keep them aside and just focus on the customer experience and then continue building, that's how we think about it. And here are the things that he says, quote. Number one, think very long term and thinking long term means surviving long term. That's why you raise money also in those kind of things. Number two, keep customers super happy. When the customer is happy, they talk about you, growth happens, they stay with you, higher retention, high engagement and so on. Number three, keep cack, which is cost of customer acquisition very low, not just the cost of customer acquisition, but in general, keeping the expense of running business very low because you want to survive longer. And if you are following the strategy of delayed monetization, I think these three are very, very important, thinking long term, keeping your cost very, very low and keeping customers really happy, super happy with you and then you continue building. I mean, it seems like they're speaking your words, man, they're speaking your language, keeping customers happy, reduce customer acquisition cost, isn't this fantastic? Stock-broking business in India in general needs some breed that they need to use to get clients in. So one of the baits is free investing in mutual funds which can be done free, even otherwise, without any broker. The second is all discount brokers have offered looking at a lower fee, so that's one more bait. So you got to reel the customers in through using the bait and then your question is, it becomes how do you monetize them? So I think just carrying on from my previous answer, the way to monetize, think of it as okay, think of it as there's essentially one mother myth that you need to sell the customers to monetize it. You need to sell them the myth of alpha and a cousin of alpha, I'll come to the cousin of alpha, but as alpha and the cousin of alpha, and what are they? The alpha in finance jargon is that you can make more money than the market on a risk-adjusted basis in simple English more than the market, but the key word on a risk-adjusted basis is important, we might come back to it. And the cousin of alpha is that on a risk-adjusted basis, equity will do better than fixed income on a risk-adjusted basis, okay? They're the words very important. Yes, on an expected basis, equity will do better than fixed income, but on a risk-adjusted basis, finance theory says, no, it doesn't, it's just because of more risk, etc., etc. So you've got to get customers to believe in these two mother myths of alpha and this cousin of alpha that equity is great and you can do even better on equity or even fixed income, you can earn higher returns on fixed income. So you're real-time in with these bates of low, I mean zero fee on mutual fund investing, discount broken on fees, I mean very low fees on normal stock trades, and then you've got to sell them through education, what do you call education, but actually it's not really education through various ways, newsletters, education, etc., you've got to sell them these mother myths of alpha and the cousin of alpha. What's it kind of indoctrinated on them on this, on what this propaganda into their mind? Then I mean they are, they are, I mean you can reel them in essentially. So that's essentially, I mean there can be, there are infinite ways to monetize them then. So it's like, you know, I mentioned this elsewhere in an article that imagine how a magician in the real world does magic. There are many different ways of doing magic. I mean many different magic tricks, we don't believe that they are really, you know, define the laws of physics or doing anything that is like God, but they are magic tricks. And there are many different kinds of magic tricks. So the way you, where you make, I mean maybe disappearing is a category of tricks, okay. But within disappearing, disappearing elephant is different from the way you make the statue of liberty disappear, which is what a magician like David Copperfield did. So different ways to play these tricks. So with this mother myth of alpha and this cousin of alpha, you can get them to do all kinds of things. You get them to do stock trading. You get them to do futures, you get them to do options, you get them to use margin trading. If the regulator allowed it, you even, I mean, the only bound by what the regulator will allow the regulator allowed you to do sports betting, which is a regulator. Won't allow you to do that. If the regulator allow you to do crypto, you do that. You do anything the regulator will let you do as long as you can find a way to make them. That's pretty much the model of all financial services companies. Very dim view. But okay, let me just ask a couple of, follow up. So okay, number one, I get your point, Avinash, but let me just give a couple of data points to sort of like in gross, well, defense and honestly, my admiration of growth. So here they are. And this is by the way from their DRHP, right? And maybe Anand will remember this. So in the DRHP, they obviously, when they had gone public in November last year, they had basically had a bunch of numbers that they put out. And here are some of the numbers that they put out. Number one, they have a DAU to MAU ratio, which is the daily active users to monthly active users, which is in product terms, it's called stickiness of close to like 57%, which means that that is the kind of stickiness that they have. Now, okay, you could say find that happens because people keep coming back to use it, because they're all like traders checking their things, etc. 81% of their customers are outside the top six metros. And 83% of their acquisition, we talked about their customer acquisition cost, 83% is organic, which means it's just happening by word of word. They are not to their credit. They are not going out and putting ads out there and saying, oh, you're going to get like, we're going to make you rage. This is what's going to happen. It's not doing any of that. It is just purely through word of mouth that people are coming in just on that platform. So, I don't know, I feel like some of these things sort of like I connect back to Lalith's interview that he did with Rohin at that point in time. And to say that we'll obsess about the customer, we will talk about this, we will bring our keep our customer acquisition cost on seems like they've done a lot of those things. I would have a different view here. My observation among the most aggressive advertisers in the industry is grow. If you see any IPL match, there'll be grow. And the message is largely up to mistake India is growing, you also can participate in that which is fine. So, I do not agree that it does not advertise regularly or aggressively, it is a very aggressive advertiser. From what I remember from an initial analysis that we had done, the add costs upon sales of grew is far higher than that of a lot of other brokers. It was a customer acquisition tool which is okay, it runs a business, it has to do what it has to do. It has to answer to VCs who are shareholders and the VCs need an exit. Oh, that's fine. So, but I do not agree that it is not advertising as much and it is this advertising that has also probably helped it reach out across the country into the smaller towns and all. That's all I think. Fair. One thing that I will add is if you look at the latest results of grow, right? And in the very end of their FAQ, they have this one question which is where is the company deploying cash and I'm just reading it out. The company in this case grow generated 6,800 million. So, I'm assuming yeah, in profit adjusted tax during Q4, FY26 and is deploying. I guess that's around 686 crores, right? And it's deploying the earnings including proceeds from the fund raise for scaling, lending business on the balance sheet within broker and consumer credit, which means MTF is around 500 crores and LAS and PL is around 105 crores. What is LAS and PL? You know, on it. LAS is loan against the shares. Right. And the other is actually personal loans. Personal loans? So personal loans will be unsecured loans, LAS will be secured loans. Got it. These are like, it seems like it is taking all of its money and really pushing into lending. Yes. It's actually getting into lending in a big way now. Yeah, that's the truth. I think what I'll add on that is that if you look at the legacy brokers like HDF securities, I say, I say securities, they're very different animals in terms of high broker fees, etc. Correct. But I'm not saying anything. I don't intend to say anything good about them, but I'm trying to say that they have lower margin trading facility interest rates. So in a sense, the customers of grow have come in because of low broker fees and some of those. They pay a higher interest rate on margin trading facility significantly higher than the customers of HDFC, I say securities. And in a sense, once you have the customer in your ecosystem, he's not, I mean, you're charging 16%, another guy charging 10%, he's unlikely to move just because of that. Maybe if he's a very large investor, he'll move his broker because of that. But once you have this bunch of people who have your Deemat account or using your service, generally happy with the trading engine, you can charge them a higher than normal fee interest rate. And it's good for the company in terms of their bottom line. Interestingly, if you look at it, the MTF book of growth is still far smaller than that of a lot of other brokers. So like, in June 1, entire book is much higher than growth. And the bigger guys, the ACS, ACS, ACS should be far, far higher. So they are the majority now. This company wants to increase its MTF book because it sees that others are already in the market and it says, if others are there and are so big, I can also become so big to what's wrong with that is their argument. It is a fair argument in a sense. But then the interest rates also matter. People, customers actually make money if interest rates are so high. Customers as I've not said will make money. If the return on the investment is more than the interest rate for that period in time, it's a double-est vote and it can cut deeply. Okay. I mean, I get what the two of you are saying. I'm still going to continue down my train of barreling down and telling both of you that it is a fantastic company with really, really underappreciated and I'm generally mean it. I would agree with you on that on one point for sure. It has to ensure that the number of participants in the capital markets in the country has really gone up because able to do what other brokers were not able to do, it expanded the market. No, there's no question about that. But despite that, I think, I mean, now I'm playing the other side. I think somebody brought this up if I'm not wrong in the Ernie's call, where somebody mentioned that, okay, fine, you expanded the market all that is great. But if I'm not wrong, the number of active traders at the National Stock Exchange has been the same for a while. I think it's at that 50 million mark. If I'm not wrong for the last sometime, Avinash, do you know this? I haven't looked at the numbers. Very, very far from my world. But finish your point. Yeah, I'm sure. And then do you have a sense of this? Does the number of active traders has remained same for the last like two, three years or something? I seem to remember somebody mentioned this in the Ernie's call. Overall numbers are under pressure. Yes. Also because of the curves on Fender, which has happened. Correct. So a lot of small traders, no retail traders have probably caught out of the market or are on the sidelines now. That's right. But from its PPT of this earnings call, I get a sense that this company has been able to increase revenues even from Fender. So it's been able to do things. It's been able to add to its customer base, while the overall industry customer base is under pressure. Basically, like, grew, grew, grew. And I think now the part that I want to get to is its quote unquote portfolio of things that it is fighting. Like we've already brought in lending, keep lending on the side, which clearly is where they're investing. And that's great. So let's talk about the insurance that they're trying to sell. Let's talk about the wealth management. I mean, I should do a point of view on wealth management as a whole, on the revenue models, et cetera. And how does it work? I haven't looked at the wealth management business too much, apart from the acquisition of wisdom, et cetera. But okay, let's take a step back here. Sometimes I'm a little, I come across a little too harsh. So let me just say the counter view to that. Yes, thank you. The counter view to that is, it's not going to be as good as you think. No, I managed to convince you. Come on, let's do it. No, the counter view is in a very broad sense of the world. The world. There is no company in the world in financial services in a very broad sense, wealth management, asset management, broken, who has managed to make money in a straightforward, transparent manner. It's largely not possible. So essentially you have two choices. You want to be transparent or you want to make money. You can't do both effectively. People will say, oh, but what about Vanguard in the US? But let's just park that for a minute. I mean, I think when Vanguard is now doing things that Jack Bogle wouldn't wanted to do. The broad point being that, you know, I'm fanatically obsessed with market-capped, automated passive index funds in short term, short term index funds, but longer word, I'll explain why market-capped, weighted passive index funds. And broadly, if you were to look at that kind of a product and offering product as a mutual fund and offering as a wealth manager, broadly no one can make money as a wealth manager. No one can make money as a fund house. No one is even trying to do that because you know you can't make money on it. So to be fair, the fair transparent way to give clients what's good for them, tell them what's good for them, nobody's going to make money on it. And I have not seen a counter example in India to it so far. Let's keep banking aside for a separate, it's a little complicated animal, but I think that rule applies to banking also. But broadly, nowhere under the CBI ecosystem, can you say that it's possible to do this in a straightforward transparent way. So just to clarify, I'm a fairly, I'm fairly fanatical about liking index funds. And if you look at an index fund investor, he just needs, you know, a few different products. He needs some Indian equity index fund like Nifty 50 or Nifty, whatever something else. He needs ideally a way to invest also to India, but the RBI in the complex department have largely blocked that. So today, as of today, it's a very tough apart from gift city and each other. That's the way to do it. Correct, but that comes with own strings attached. So it's not that easy for everyone and you can talk about those strings attached if you like. And he needs some way to make some safe investments like, you know, fixed deposits and safe mutual funds. That's pretty much all the investor needs. Everything else that almost all fund houses are selling to them on making is just extra nonsense that investors don't need really. And I would say every single one without exception, I cannot name an exception so far. Okay. Yeah, you're right. It wasn't as charitable as I thought. it would be. I thought I managed to win you to my side, but you've just stayed in your side and added a few caveats. Okay, great. And then do you have a point of view on the wealth management side? The reason I bring up the wealth management side is because I think of say, if you look at say, PMS and if you look at say AIFs, and we have talked about PMS and AIFs in the past over here in this podcast as well, where fundamentally they do one of two models. Either they basically are like, okay, we will take how much of our money that you want to invest, which is the total assets, and we will take either a share of it for all the money that we make for you. We'll take a commission out of it. Or it is, I don't know if they do a flat fee, two people do a flat fee of inash on the wealth management side, they do is it. Yeah, you're talking about a flat percentage, you mean, in a sense? Flat percentage, fine. Yeah, there's a lot of that. There is a lot of that, right? So you do those two things, but in this case, I guess the way I'm thinking about grow is that in a sense, it seems like a life cycle play. Like think about it, you got a bunch of people first-time investors, again, un-and-the-grid it me on this, that you got them, you expanded the market. And I believe that those investors came in, had an initial set of returns that they saw during the boom years of 2020, 2021, 2022, etc. And then after that, they realized, oh, I guess we have to now also do insurance. Oh, we are doing insurance. Oh, now we can also do lending a little bit. Oh, we can do lending. Oh, now you can also do well. So these people, their wealth has grown and because their wealth has grown broadly speaking, you have basically started to create more and more products as their life cycle continues. Is this a fair way to think about grow? Like in a sense, the analogy that I give is that it's almost like they're building a bridge across a, probably like a very wide ocean or river. And there are people behind them. And they are like 10 steps ahead of everyone laying the bridge and all of their customers are walking along. Is that a way to think about this? Un-and-the-n is that finally coming back to the end? Why investors see them and give them that premium because they know that you have this huge base of customers with you. Fine, maybe you can't monetize them through direct, etc. But we are betting on your ability as a company to be able to figure out what these customers want as they grow and mature. And you will be the one to create the products for them. And they will stay within your ecosystem. And that is really what we are giving you the premium for. Yes, I think that makes sense. It is going to go after the entire wallet of the customer. It's going to go into see that as these customers, young customers mature, they become richer. They might want other products, which probably also includes wealth. But with the wealth offering, they are also catering or targeting another section of customers, which are outside its base now. But the wealthier customers who have not yet got on to the platform of growth. They are saying we aren't only about a pro-curve. We aren't only about these kinds of fees which are low. We have other offerings. And in this country, the wealth management business is booming. And there is an opportunity there which the company wants to explore. So it's going to cater to both existing customers on a life cycle basis. And it also wants to cater to others who are outside its fold now. And that's possibly one of the things that the market is looking at. It isn't only a broker, but that said, this wealth management business is very competitive. And as it stands now, the business of wisdom that it has acquired is lost making. The wealth management business as of now is a drag. But the hope which it and its investors would have is that that will change and it will make it a lot of money. Yeah. Another decision that grew made and we'll end with this is also the decisions on what not to do. It seems like we have talked about this entire podcast about, oh, here are all of the things that grow did. And here are all the decisions that went to wealth management insurance, went to lending, went to empty F, etc. But it also made very deliberate decisions about what it will not do. Very importantly was in 2024, they basically surrendered their payment aggregator license. So this is when Grewad applied for a payment aggregator license that got it also from the RBI. And just before they went public or just after they went public, if I'm not wrong, they basically said, okay, you know what, we don't think this makes sense. And they just like, they just forfeited it. Right? Yeah, it's within two months of going public. So it must have been in January. So in January this year, they sort of gave it up. And they are logic at that point in time, very broadly, even though they didn't give a very public statement about it. But I think, I don't know if it is there in one of the one in call. But I remember reading a story about how the reason why they gave it up was they said, look, what's the point? We think that we have already acquired all of these customers. And in the minute we get into payments, it's sort of like clashes with our ethos often, I need to create wealth management and all of these other things. So it doesn't really make sense. So they gave it up. And they joined another company who also we can talk about how much I admire that also gave up the payment aggregator license, which was Zomato. Zomato also did the same thing. They got a payment aggregator license and then they gave it up. So I feel like the reason I bring this up is because I find this very interesting because we are living at a time where everybody is rushing into broken and that includes, say, phone pay, which of course is a payment company that is running into broken and it launched share market, et cetera. Avinaesh, you spoke about basically, you know, like legality, betting, all of those things, dream level, which basically was doing a form of gaming, real money, gaming, et cetera. Now, just like two weeks back, I think has announced that it's going to get into stock broken, which one could argue is a different form of gambling, but that's where it is. So I feel like all of these companies are like rushing into broken because they kind of are realizing that, oh, this is actually the place. This is if you want to make money, if you want to be profitable, if you want to grow, if you want to essentially build a business in the finance side of things, seems like this is the path to go down. And payments was probably not the place where it would end. It just begins there. And I feel like grow is like five steps ahead of all of them. That's really how I see it. Yeah, I think I just add that the, you know, imagine that you ran a gambling business. A good way to put us a layer of lofty objective on it is to say democratization of finance, democratization or whatever. So I think the last sheet has got everyone to agree that the democratization of finance is a very important objective. But this is not democratization of finance. This is democratization of gambling. So it's, I think we should, we shouldn't fall for the story that, you know, the fact that how many of our million traders are there and they move up and down. Those are, if there are 50 million or 50 million more than are required really. It's, I mean, democratization of finance and this way is not required is just what an entrepreneur says to justify running a gambling business. That's it. How would you, what from Avina should be your standpoint then? What is really the, what's your broad philosophy of how this works? You're basically, I think, can I summarize it as what you're really saying is look, all of these bells and whistles and all don't matter. All that matters is, I mean, at a very broad level, what you're saying is invest in passive funds and invest in like fixed deposit, fixed income, few things here and there, pay money to somebody to manage your money and just be transparent about the whole thing. Is that broadly of a philosophy on this? Roughly yes. Yeah. Just recap. Invest in a nifty 50 index fund direct plan growth option or equivalent product, which you don't need any broker to do. You don't need to have a broken account. You don't need to have a demat account. You can do it on the website of the mutual fund house or other platforms like NF Centrel Jav free of cost. You can buy arbitrage funds or equivalent products which to keep your money safe, which again, through direct plan growth option keeps your money safe. Maybe you need some money that you can use very fast. We run into a medical emergency like in a few days. You keep that fixed deposits and the international road has been knocked out by RBI and the international partnership partners. So let's park that for a minute. That's pretty much all that are sensible knowledgeable investor requires. Maybe you can add a spin on that saying someone who wants to do something a little more complex might need some exchange-shaded funds. Maybe, maybe not. That's the only I see on the cake that might ever be required. That's it. That's what the most sophisticated knowledgeable investors do. Everything else is actually not sophistication. It is actually those investors being foolish. So all of those users are actually, there's another kind which says that I'll use the good services of these brokers like buying mutual funds which through platform and free of cost. I'll buy my ETFs at low-broken fees. I won't get caught by the rest of it. I think that's a possible angle. But really, I mean, that's one percent of people who are saying, "I'll use all the good services cheap and I won't fall for the rest." But leave them aside. You don't need any of this to invest your money. You can do it without any of that. You don't even need an advisor to or a registered investment advisor to buy any of these nifty-fifty index funds or bitter-arch funds. You can just go buy it yourself on any of the mutual fund houses. Websites, that's it. If you want an advisor later, you get it. You don't want, don't get it. You don't need an advisor at all. Actually, I think for people who don't know much and advisor is quite dangerous. Okay, fair enough. Ah, don't agree, but fair enough. Anand, walk us through, if you put yourself in the shoes of, well, maybe grow. What is the gross future? Like, what are you going to be keeping an eye on? Actually, not in the shoes of, when the shoes of Anand, the finance editor of the can. Like, we've already seen what growers have done so far. You've done a bunch of stories about them. I'm sure you've been following. What do you expect to see in the next few quarters, months that you're going to be keeping an eye out? I think it would continue to de-risk its business, which it has started from the FNOS side. From the FNOS side, and eventually it will also continue, it will also de-risk the MTF business. Of course, once MTF becomes very big, I have a sense that the regulator will go after MTF also at one point. So that it will do. So it will keep adding all kinds of things on wells, on other offerings, other kinds of lending. It will do. It will do the broken business for sure. See, while I agree with Avinaar's that you already sophisticated investors don't need to kind of dabble a lot. They can be simple. But the fact is that there are all kinds of investors in the market. People do want to gamble. And actually, gambling is among the oldest things in the world, and that will continue. So when there is demand, they'll be supplying. So that's how it will work. But yes, sophisticated and smart investors. Sensible investors don't need a FNOS. Don't need MTF. I fully agree with Avinaar to all the points he made there. The regulator eventually also think of restricting the participation of investors for those who are knowledgeable, accredited investors. But those who are able to pass a certain exam, understand these products well, that may happen. So, all the scorn brokers eventually will have to de-risk their business from these kind of risks which will be there. Whether on FNOS or on MTF. So they'll do wealth. They'll do other kinds of lending, other kinds of broken. They'll do MF. All that will happen. Yeah. And it seems like grow has all the constituents for that. It has the constituents for MF, which is mutual funds. It has the constituents for lending. It has the constituents for wealth. It seems like it has all the building blocks. So, I would still say and bet that, regardless of whether, whether, you know, the stock broking is gambling or not gambling, forget the moral side of it. I'm just saying that if you just look at it as a company, it feels like it's a company that is like, that is sort of like, laid all the elements to protect itself and to aggressively expand into areas that it thinks are going to be the future for any kind of cross-selling for such a business. So, I think with that aspect, I feel like grow is very well positioned. I think that is really what sophisticated investors in grow are seeing. That's possible. All right. Thank you so much, Avinash Anand, such a wonderful discussion. Thank you. Thank you, Pravind. Thank you, Anand. Thanks. Pravind, thanks, Anand. Super. Thank you for listening to this episode of 2x2. Today's episode was produced and hosted by me, Praveen Gopal Krishnan, and the audio production was done by our technical producer Rajiv CN. If you feel like there's something that we missed out in this discussion or just want to share some thoughts and some feedback, just write to us at TWO, BY, TWO, at the rate of the hyphen, Ken.com. Also if you're listening to this episode on Apple Podcasts or Spotify, just show us some love and leave us a rating or even better, leave us a review. Finally, if you love this episode, do share it with your friends, family or colleagues who might find it fun to listen to as well. As always, we'll be back again next week with another great discussion and of course, a 2x2.