Dhan, the innovative stock broking startup, has marked a significant milestone by reporting its first-ever profits of ₹155 crore for the fiscal year 2023-24. This achievement comes as the company experienced an astounding 600% surge in gross revenues, which reached ₹380 crore compared to ₹54.2 crore in the previous fiscal year. The Mumbai-based startup shared these impressive figures in a note to its shareholders, indicating a promising trajectory for its future.
Despite the encouraging financial results, founder Pravin Jadhav has opted not to comment on the company’s performance. Dhan is actively engaging with potential investors, including private equity firms and sovereign wealth funds, in pursuit of raising approximately $100 million in a fresh equity funding round. This capital infusion will enable Dhan to expand its product offerings and further strengthen its position in the competitive market.
However, the startup acknowledges potential challenges ahead. Dhan anticipates that recent regulatory measures impacting the speculative futures and options market could lead to a 25-30% decline in its gross revenue. Nevertheless, the company remains optimistic about its growth trajectory, as it continues to innovate and adapt to market conditions.
Founded in 2021, Dhan has already raised around $22 million from notable investors, including Mirae Asset Ventures and Beenext. With these funds, the startup plans to enhance its margin trading funding services and develop new revenue-generating products, catering to the evolving needs of its user base.
Dhan’s remarkable growth reflects the overall expansion of the equity trading market, particularly among new-age discount brokers. For instance, Peak XV Partners-backed Groww reported a fourfold increase in net profit for its core broking business, reaching ₹297 crore for FY24, with gross revenues more than doubling to ₹2,899 crore.
In addition to its impressive revenue generation and profitability, Dhan has established itself among the top 10 stockbrokers in the country, boasting around 740,000 active traders, according to data from the NSE. Unlike many of its competitors, Dhan primarily focuses on catering to seasoned traders, with approximately 90% of its user base migrating from other platforms. Furthermore, 95% of its clients are based in major cities across India, showcasing the startup’s appeal to urban investors.
The combination of attractive pricing and superior product offerings has positioned Dhan favorably in a competitive market, allowing it to attract many younger participants eager to engage with the Indian equity market. As Dhan looks to the future, its commitment to innovation and expansion will be critical in navigating the evolving landscape of stock broking.