Groww, an investment platform based in Bengaluru that is well-known for making investing easier for young Indians, is about to make its largest move to date: going public. Through the private pre-filing process, the parent company, Billionbrains Garage Ventures Ltd., has submitted a Draft Red Herring Prospectus (DRHP) to SEBI in preparation for an IPO.
For those who are not familiar, this pre-filing approach allows businesses to test the waters of an initial public offering (IPO) in a discreet manner without disclosing all information up front. It gives companies more leeway by giving them 18 months (instead of 12) to move forward with the IPO following SEBI’s comments and to modify the offering size by as much as 50% prior to final disclosures.
According to sources, Groww intends to raise between $700 million and $1 billion by combining an offer for sale (OFS) with a new issue. It is anticipated that the money raised will be used to improve corporate operations and advance technology.
The story of Groww is a quintessential Indian startup triumph. The platform, which was founded in 2016 by former Flipkart employees Harsh Jain, Lalit Keshre, Neeraj Singh, and Ishan Bansal, initially focused on investing in mutual funds before expanding into stocks, initial public offerings, and exchange-traded funds (ETFs). Based on the number of active investors, it is currently the biggest retail broking firm in India.
However, the industry is going through a difficult period right now due to the IPO hype. All brokers are struggling with shifting investor sentiment and regulatory changes. In April, Groww experienced a decline of 75,000 active users. The business is still financially stable, though. Groww reported an operating profit of ₹535 crore in FY24, a 17% increase over the previous year, despite a one-time tax hit of ₹1,340 crore as a result of moving its base from the U.S. to India. At ₹3,145 crore, its revenue more than doubled.
The IPO is being managed by industry titans such as Motilal Oswal, Axis Capital, Citigroup, Kotak Mahindra Capital, and JP Morgan India. With the support of well-known investors like Microsoft CEO Satya Nadella, Ribbit Capital, Tiger Global, and Peak XV (formerly Sequoia India), Groww’s IPO has already generated interest from investors.
Additionally, confident is Singapore’s sovereign fund, GIC which recently applied for regulatory approval to acquire a 2.14% stake in the business. According to earlier reports, Groww is valuing the company at an astounding $7 billion and is seeking $150 million from GIC as part of a $250–300 million pre-IPO round.
One thing is clear: Groww is placing a significant bet on its future and inviting the rest of India to join in. The specifics of Groww’s IPO will become clearer once SEBI approves it and the revised DRHP is submitted.
