The entry of discount broking platforms into the asset management business is beginning to reshape India's mutual fund industry, with the fund houses backed by Groww and Zerodha recording asset growth far ahead of the broader market.
While the mutual fund industry's assets under management (AUM) grew 17% year-on-year to ₹82 lakh crore in April 2026, the fund businesses of Groww and Zerodha expanded at a much faster pace, aided by their large digital investor bases and focus on low-cost investment products.
Groww AMC saw its AUM nearly triple to ₹4,730 crore in April 2026 from ₹1,660 crore a year earlier.
1 June 2026
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Meanwhile, Zerodha Fund House increased its AUM 2.6 times to ₹13,133 crore from ₹4,934 crore during the same period.
Digital Distribution Advantage
The rapid growth highlights the advantage that digital-first brokers enjoy in distributing investment products.
Groww currently has around 1.3 crore active investors and nearly 1.9 crore active users, making it the country's largest stockbroker by active client base.
Zerodha has approximately 68 lakh active investors and around 1 crore active users.
Industry participants believe these platforms are benefiting from their ability to cross-sell mutual fund products to a large base of existing investors already using their apps for stock market investing.
Zerodha Fund House, a joint venture between Zerodha and Smallcase, launched its first mutual fund scheme only in October 2023.
Groww entered the asset management business through the acquisition of Indiabulls Mutual Fund in May 2023, when the fund house managed assets of just ₹342 crore.
Focus On Passive Funds
Unlike many traditional asset managers, both Groww and Zerodha have focused heavily on direct and passive investment products.
These schemes generally carry lower expense ratios because they eliminate distributor commissions and actively managed fund costs, allowing a larger share of returns to flow back to investors.
The strategy appears to be resonating with younger, digitally savvy investors who are increasingly opting for low-cost index and exchange-traded fund (ETF) products.
Industry Evolution
The growth comes amid a broader shift in how Indians invest in mutual funds. Although the country has around 13-14 crore mutual fund accounts, only about one-third are considered active and unique.
Digital investment platforms including Groww, Zerodha, Angel One, Paytm and PhonePe have emerged as major contributors to new mutual fund and SIP account additions in recent years.
Market participants had anticipated that broker-backed fund houses could attract new investors by leveraging their distribution reach and existing customer relationships.
The latest AUM figures suggest that the strategy is working.
The momentum also comes as Groww recently received approval from Sebi for the acquisition of a 23% stake in the company by US-based investment firm State Street for ₹580 crore, underscoring growing investor confidence in India's digital investment ecosystem.
