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CCI approves Groww’s acquisition of Indiabulls Mutual Fund Business

The Competition Commission of India (CCI) has approved Groww’s parent company Nextbillion Technology Private Ltd for the acquisition of a 100 percent stake in Indiabulls Asset Management Firm Ltd (IAMCL) as well as Indiabulls TrusteeCompany Ltd (ITCL). The CCI announced the acquisition’s clearance over Twitter.

Groww and Indiabulls logo on square card

Illustration: TechStory × Freepik (CosmoStudio)

Nextbillion Technology Private agreed to acquire out the 100 percent stake in the investment firm for Rs. 175 crore on May 11, 2021. The acquisition indicates Nextbillion Technology’s (Groww) debut into the asset management business of handling mutual fund schemes.

Groww’s chief executive officer (CEO) and co-founder, Lalit Keshre, noted in May that the company intends to make mutual funds much more accessible by offering them easier, transparent, and lowering the cost. Indiabulls will leverage Groww’s platform with its 1.5 million user base to expand its mutual fund offerings. According to media sources, Indiabulls is divesting its mutual fund operations in order to focus on its primary business, retail estate asset management.

Nextbillion owned Groww is a stockbroking platform founded in 2017 by former Flipkart employees Lalit Keshre, Neeraj Singh, Harsh Jain, and Ishan Bansal. Groww provides direct mutual fund options as well as a smooth and transparent investment model through its mobile app as well as a web platform. It is also a depository participant in India. The startup competes against Zerodha, the bootstrapped unicorn, IndWealth, backed by Tiger Global, and Scripbox, an Accel Partners portfolio firm.

Groww is one of the first fintech startups to penetrate the asset management sector following the capital markets regulator SEBI’s approval of digital platforms into the mutual fund business.  Indiabulls Mutual Fund has 13 programs, with a quarterly average asset under management of Rs 663.68 crore as of March 2021, a significant decline from Rs 921.33 crore during December 2020.

Groww’s revenue in FY20 was around Rs 76.16 lakh, with a net loss of Rs 7.93 crore, an almost 3,348 percent increase from Rs 23 lakh in FY19. The startup’s expenses increased by more than 2,500 percent to Rs 8.69 crore in FY20, up from Rs 31.76 lakh for FY19. Several companies have recently entered the mutual fund market since India’s assets under management have increased fivefold during the last 10 years. As of August 31, 2021, India’s assets under management were at Rs 36.59 lakh crore, up from Rs 6.97 lakh crore in August of 2011.

The Bengaluru-based startup joined the prestigious unicorn club after securing $83 million in a Series D round backed by Tiger Global Management alongside existing investors including Sequoia India, Ribbit Capital, YC Continuity, and Propel Venture Partners who also participated in the funding round.

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