What Is Pledge in Groww and How It Works

A stock may practically be screaming “buy me”. It could be a brilliant opportunity. But just because your Groww balance is disappointingly low on cash, you think you cannot act on it. 

We’ve all been there. What if you could get the funds you need for that trade without selling the blue-chip stocks you’ve been holding for the long haul?

This is where the pledge feature in Groww swoops in to save the day. It's a powerful tool that lets you use your existing stock portfolio as security to get extra margin for trading. Think of it as putting your assets to work, even while they’re resting in your Demat account.

This guide will break down everything you need to know about the Groww pledge system. We’ll cover the core concept, the step-by-step process, and the specific Groww pledge charges involved. By the end, you’ll understand exactly how to pledge shares in Groww like a pro.

Table of Contents

• Understanding the Core Concept: What is Pledge in the Groww App?
• Groww Margin Pledge: How the Mechanism Works
• A Transparent Look at Groww Pledge Charges
• How to Pledge Stocks in Groww: A Step-by-Step Guide
• Benefits vs Risks: Is the Pledge Groww Feature Right for You?

Understanding the Core Concept: What is Pledge in the Groww App?

So, what is pledge in Groww app exactly? Well, the concept isn’t really that complicated. Pledging your shares means you are formally offering your stocks to Groww as collateral. In return, Groww provides you with a credit line, known as margin.

This margin isn't cash you can withdraw to your bank account. It's a specific facility designed to increase your trading power, particularly for trading in the Futures & Options (F&O) segment. You are essentially unlocking the hidden value of your investments without actually selling them.

The most important takeaway is this: you remain the owner of your pledged shares. You continue to receive all corporate action benefits that come with ownership. If the company declares dividends or announces bonus shares, those benefits are credited directly to you, not the broker. The pledge holding in Groww simply puts a temporary lien on your shares.

Looking for a deeper evaluation before pledging your shares? This in-depth Groww review uncovers fees, features, and real user insights to help you decide with confidence.

Groww Margin Pledge: How the Mechanism Works

The process of securing a Groww margin pledge might sound difficult, but it’s a well-oiled machine running in the background.

It involves you, Groww, and the depository where your shares are held (in India, this is typically CDSL or NSDL). The system is designed to be secure and transparent.

Need clarity on how NSDL Demat accounts operate in pledging scenarios? This NSDL Demat Account offers a complete technical overview for investors. If your shares are held with CDSL, here's an in-depth resource on CDSL demat accounts to help you understand pledging operations.

Here’s a breakdown of the entire mechanism from start to finish:

• You initiate the request: You start by logging into your Groww account. Then, just pick the stocks (and how many) you want to pledge from your Demat. Not all stocks are allowed, though. Groww has a set list of approved stocks and ETFs you can use for pledging.
• Groww forwards the request: Once you confirm your request, Groww sends the details to CDSL (Central Depository Services Limited), which safely holds your shares. This tells them to mark the shares you've selected as pledged.
• You authorise the pledge: This step is important for keeping your account safe. You’ll get a notification and be taken to the CDSL website. There, you need to approve the pledge by entering your TPIN (a special password for transactions) and the OTP sent to your registered mobile number and email.
• Pledge confirmation & margin credit: Once you approve the request, CDSL marks your shares as pledged. This update is shared with Groww, and your account is given the margin amount. You can now use this margin to trade in F&O (Futures & Options).

A key concept here is the "haircut." The full value of your shares is not given as margin. A certain percentage is deducted by the broker to account for market volatility and risk. For example, if you pledge stocks in Groww worth ₹2 lakh and the stock has a haircut of 20%, you will receive a collateral margin of ₹1.6 lakh.

A Transparent Look at Groww Pledge Charges

Using the pledge on the Groww feature is an easy way to get margin, but it’s not exactly free. So, if you wanna manage your trading experience efficiently, you need to know these charges.

The primary costs are the pledge charges in Groww, which you have to pay every time you make a transaction request. There is a fee for creating the pledge and another for removing it (un-pledging). These charges are for the service and paperwork involved in communicating with the depository.

To make the costs crystal clear, here is a simple breakdown of the Groww pledging charges.

Type of Transaction	Charge per Request (excluding GST)	Notes / Frequency
Pledging Shares	₹20	This is a one-time fee per pledge request, irrespective of the number of scrips or their value.
Un-pledging Shares	₹20	This is a one-time fee per unpledge request when you want to release your shares.
Margin Shortfall Penalty	As per exchange norms	This is not a direct Groww pledge charge, but a related cost. It's levied if your margin drops below the required level and you don't add funds.
Interest on Debit Balance	0.045% per day	If using the margin leads to a negative cash balance in your account, interest is charged on that debit amount until it's cleared.

Understanding these charges is part of being a smart trader. The flat fee structure for the Groww stock pledge makes it cost-effective for larger portfolios, as the charge remains the same regardless of the pledge value.

How to Pledge Stocks in Groww: A Step-by-Step Guide

Now for the practical part. Pledging shares on Groww is simple and entirely online; you can do it right from the app or website. This section will walk you through the steps in a clear, easy way.

The platform is built to be user-friendly, so you can finish the process in just a few minutes. Just remember: you’ll need your CDSL TPIN (a 6-digit PIN used for authorising the pledge).

If you don’t have it or forgot it, no worries, you can easily generate a new one through Groww or directly on the CDSL website.

Pledging in Groww App: The Complete Walkthrough

Follow these steps precisely for a smooth pledging in Groww app experience:

1. Log in and navigate: First, log in to your Groww account using your credentials. On the main dashboard, navigate to the 'Stocks' tab. Still haven’t opened your Groww account? Follow this step-by-step Groww demat account opening guide to get started in minutes and unlock margin pledging.
2. Access your holdings: Go to your portfolio or holdings dashboard, where all your invested stocks are listed. You will usually find an option labelled "Get margin against stocks" or simply "Pledge."
3. Select stocks for pledging: Click on the pledge option. You will be shown a list of all pledge-eligible stocks from your portfolio. Select the specific shares you want to use as collateral.
4. Enter the quantity: For each selected stock, enter the quantity of shares you wish to pledge. The system will show you the estimated collateral margin you will receive for that quantity after the haircut.
5. Verify and proceed: Double-check your selection and the quantity. Once you are sure, click on "Verify Pledge" or a similar button to proceed. This action officially initiates the pledge request.
6. Authorise on CDSL: You will now be redirected to the CDSL authorisation page. This is the most critical step. Enter your 16-digit Demat account number (BO ID) or PAN, followed by your TPIN.
7. Enter OTP for final confirmation: After submitting the TPIN, you will receive an OTP on the mobile number and email address linked to your Demat account. Enter this OTP in the designated field to approve the transaction.
8. Confirmation and margin credit: That’s it! Once authorised, you’ll be redirected back to Groww. The pledge is typically processed by the end of the trading day (T-day), and the margin will be reflected in your Groww balance on the next trading day (T+1).

Note: Groww generally credits the margin within 10–15 minutes after pledge authorisation in normal circumstances. In rare, busy periods, credit might show up by the next trading session (T+1), but most users should see a quick update.

You have now successfully completed the pledge in the Groww app process and can use the newly available margin for your F&O trades.

Benefits vs Risks: Is the Pledge Groww Feature Right for You?

The ability to pledge on Groww is a financial tool, and like any tool, it can be amazing and super useful, but with some T&C applied. It offers significant advantages but also carries inherent risks that every user must understand before proceeding. Making an informed decision requires weighing these pros and cons carefully.

Key Advantages of Pledging Shares

The upsides of the pledge in Groww feature are compelling, especially for active traders who want to maximise their capital efficiency.

• Liquidity without selling: This is the primary benefit. You get access to immediate funds (margin) for trading without having to sell your long-term investments. This allows you to hold onto your prized assets while still being able to act on short-term market opportunities.
• Retain ownership and corporate benefits: When you pledge shares in Groww, you don't transfer ownership. The shares remain in your Demat account, and you are still entitled to all corporate actions like dividends, stock splits, and bonus issues. The dividends are credited directly to your registered bank account.
• Cost-effective funding: For short-term trading needs, pledging can be more economical than taking out a personal loan. The primary costs are the flat Groww pledging charges per transaction, which can be minimal compared to the interest accrued on conventional loans.
• Speed and convenience: The entire process, from initiation to margin credit, is digital and quick. You can get access to margin within a day, making it a highly efficient way to arrange funds for time-sensitive trades.

Potential Risks to Be Aware Of

While the benefits are attractive, ignoring the risks would be a grave mistake. Understanding the downside is crucial for responsible trading.

• Margin calls: This is the most significant risk. The value of your pledged shares fluctuates with the market. If the value of your portfolio drops significantly, the collateral margin you’ve received may also fall below the required level. When this happens, the broker issues a "margin call," requiring you to add more funds or pledge more shares to cover the shortfall.
• Forced liquidation: If you fail to meet a margin call within the stipulated time, the broker has the right to liquidate (sell) your pledged shares to recover the deficit. This can lead to you losing your valuable long-term holdings at an unfavourable price, turning a temporary funding solution into a permanent loss.
• Interest on debit balance: The margin you receive from pledging is the collateral margin. If your trading activities result in a negative cash balance in your account (a debit balance), you will be charged interest on that amount. As of 2025, this is typically around 18% per annum (or 0.05% per day), which can add up quickly if not managed.
• Limited use of margin: The margin received from a Groww margin pledge can primarily be used for trading in equity futures and writing options. It cannot be used for buying stocks in the cash segment or for withdrawing as cash.

Used wisely, Groww’s pledge feature can unlock hidden value in your portfolio without selling a single share. But like any leverage, it rewards caution and planning, so know the risks before you dive in.

Conclusion

To wrap it up, Groww’s pledge feature is a pretty handy tool if you want to boost your trading power without selling the stocks you’re holding for the long term. It gives you extra margin for F&O trading, the process is completely online, and you can get started right from the Groww app in just a few clicks. It’s quick, simple, and puts your idle shares to work.

But (there’s always a “but”), this isn’t free money. There are risks involved, like margin calls and the chance your pledged shares could be sold if the market dips and you don’t top up your margin in time. And while the Groww pledge charges are flat and not too high, you still need to factor them in if you're pledging often.

Bottom line: it’s a great feature if you know how to manage risk and want to make the most of your portfolio.

Want to see what else Groww has to offer and how much it really costs to use? Check out its full review on Finology Select. 

It breaks everything down for you, and if Groww doesn’t fit the bill, there are 20+ stock brokers you can compare to find the one that does.

Frequently Asked Questions

1. What is the detailed process to pledge shares in Groww if I am a new user?

For a new user, the process is the same, but starts with ensuring you have an active Groww Demat account with eligible shares in your holdings. First, identify which of your stocks are on Groww's approved list for pledging. Next, generate a TPIN from the CDSL website if you don't already have one. Then, simply follow the step-by-step guide outlined above: log in, navigate to holdings, select stocks and quantity for the Groww stock pledge, verify, and authorise the request on the CDSL portal using your TPIN and OTP.

2. How are the Groww pledging charges calculated, and when are they deducted from my account?

The Groww pledging charges are calculated on a per-request basis, not on the value or volume of shares. Groww charges a flat fee of ₹20 + GST for each pledge request you create. A similar fee of ₹20 + GST is charged for each unpledge request. These charges are automatically deducted from your Groww balance once the pledge or unpledge request is successfully processed by the depository.

3. What exactly is a "haircut" in the context of a Groww margin pledge, and how does it affect my available margin?

A "haircut" is a percentage deduction from the market value of your shares when calculating the available collateral margin. It’s a risk management measure taken by the broker. For example, if you pledge shares worth ₹2 lakh and the applicable haircut is 15%, the broker will deduct ₹30,000 (2,00,000∗15%). The collateral margin credited to your account will be ₹1.7 lakh (₹2,00,000−₹30,000). The haircut percentage varies from stock to stock based on its liquidity and volatility.

4. Can I sell my shares while they are under the pledge on Groww?

No, you cannot sell shares that are currently pledged. The pledge creates a lien on the shares, which blocks them from being sold. To sell them, you must first initiate an "unpledge" request. Once the unpledge process is complete (which also incurs a charge) and the shares are free in your Demat account, you can proceed to sell them on the market.

5. What happens to my dividends if I pledge stocks in Groww?

You continue to receive all dividends. Pledging does not change your ownership of the shares. When a company whose shares you have pledged declares a dividend, the amount is credited directly to the primary bank account linked to your Groww Demat account, just as it would if the shares were not pledged.

6. Is there a limit to how many shares I can pledge holdings in Groww?

There is no specific upper limit set by Groww on the number of shares you can pledge. The limit is determined by two factors: the quantity of pledge-eligible shares you own in your Demat account and the specific list of securities that Groww and the exchanges approve for pledging. You can pledge any quantity of shares from this approved list, up to the total number you hold.

7. What is the difference between pledging and hypothecation in the Groww app?

While both are ways to create a charge on an asset for a loan, they differ in possession. In a pledge, the possession of the asset (in this case, your shares) is symbolic. A legal charge/lien is marked in your demat, and your shares are locked. 

In hypothecation (common for car or home loans), the borrower retains possession of the asset while the lender has a charge on it. In the context of the pledge in the Groww app, the term used is 'pledge' as per SEBI regulations for creating a lien on securities for margin.