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The initial public offering of Billionbrains Garage Ventures, the owner of the Groww brand, opened on November 4 at a price band of ₹95–100/share. The ₹6,632-crore IPO, comprising fresh issue of ₹1,060 crore and ₹5,572 crore secondary sale (OFS), marks one of India’s largest fintech public issues. There are 15 selling shareholders in the OFS, including Peak XV Partners Investments, YC Holdings, Ribbit Capital, and Internet Fund. However, the promoters (Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal) are not directly diluting any stake through the IPO. At the end of day one, the public issue was subscribed to by about 57 per cent. Groww will use the ₹1,060-crore IPO funds it receives for cloud infrastructure, brand building and performance marketing, investment in NBFC Groww Creditserv to augment its capital base, investment in Groww Invest Tech for funding the MTF business, etc. The IPO is priced at roughly 33x trailing twelve-month earnings (TTM) ended June 2025. This is at a rich premium to comparable broking peers who trade in the 15-25x range. At the implied m-cap of over ₹61,700 crore, Groww will be one of the biggest capital market-linked stocks ahead of diversified players such as Motilal Oswal Financial Services and more than 2x of the likes of Anand Rathi and Angel One. The IPO pricing envisages Groww not as a broker but as a digital financial platform with options across lending, mutual funds, and advisory. Thus, the IPO will test not just investor appetite for a digital broker but the market’s capacity to value a maturing fintech whose next phase, perhaps, lies beyond pure broking (which still contributes 80 per cent of topline). The quality premium in Groww’s valuation rests on whether its efficiency can withstand a downcycle. The IPO is less about short-term growth and more about Groww’s ability to evolve from a transaction platform to a full-stack wealth utility without sacrificing margins. Hence, only long-term investors with a 5-year-plus horizon and a willingness to withstand volatility may subscribe to the IPO, as the risk-reward is balanced in the short term. In less than a decade, Groww has travelled the full arc from start-up insurgent to dominant incumbent. The young digital broker’s rise as the biggest (12.58 million NSE active clients) and fastest-growing (79/100 per cent CAGR in revenue/PAT growth in FY23-25) mirrors India’s broader digitalisation of finance. As of Q1FY26, Groww commanded roughly 24 per cent share in retail cash turnover and nearly 14.4 per cent of derivatives market turnover. This reflects its scale advantage built on product simplicity and in-house technology-led execution. As a direct-to-customer digital investment platform, Groww enables customers to invest in and trade stocks, derivatives, bonds, ETFs, IPOs, and mutual funds. It also offers value-added services, such as MTF (Margin Trading Facility) and credit solutions. Besides, it has its own AMC and payment aggregator. Across platforms, it has over 1.2 crore transacting users,1.7 crore active SIPs (1 in 3 new SIPs), and 3.7 crore demat accounts (1 in 4 accounts). Groww’s evolution from a mutual-fund-only app to a multi-asset platform mirrors how a few fintechs matured from distribution to full-stack financial utilities. Over 98 per cent of postal codes are now covered, and 83 per cent of FY25 customers came organically, underscoring a low cost of customer acquisition, a high-trust model that contrasts sharply with cash-burning peers. But while Groww’s take-rate on assets may rise toward global norms, and diversification into credit and wealth can build a more stable earnings base, neither is guaranteed. We acknowledge that Groww’s expansion sits within a powerful macro tailwind, i.e., the steady financialisation of Indian household savings. Equities as a share of Indian household assets, and active broking account penetration at 5-6 per cent (2024 data), are quite low compared to the US (22/62 per cent). So, the migration from physical to financial assets in India ensures a baseline of organic demand for players like Groww. The firm spends just about 11-12 per cent of revenue on marketing, enabling EBITDA margins above 50 per cent and RoE of nearly 50 per cent. Even as household leverage rises and market volatility returns, participation could temporarily stagnate. Yet the IPO also arrives at a near cyclical peak, when valuations, margins, and public fascination with fintechs are all high. But there are risks to contend with. One, Sebi has already enacted measures that have slowed things down in the F&O (derivatives) space. For instance, F&O notional average daily turnover contracted by 38 per cent in the June 2024 to June 2025 period, driven by a 36 per cent fall in individual investor participation in the segment. This is reflected in Groww’s Q1FY26 numbers, though Groww has taken a less severe hit (a 10 per cent topline drop but profits rose) compared to Angel One, which witnessed a 19-20 per cent revenue decline and a 50-60 per cent PAT decline in both Q1 and Q2. While Groww’s lean and highly efficient business can soften the blow, it cannot eliminate it. Strategically, Groww’s exposure to F&O is structurally lower than peers, derivatives now form roughly 60-65 per cent of broking revenue versus 70-75 per cent for some peers. Thus, a dip in F&O orders would have a lower impact on margin hit for Groww vs. peers. Of course, if F&O shifts trigger changes in investment patterns, the re-mix cushions cyclicality but extends monetisation cycles. Two, if trading and investment slow down due to stock market upheaval, things can look entirely different. In markets, structural doesn’t mean linear. Retail enthusiasm waxes and wanes with market sentiment. During the 2008–09 global financial crisis, several listed brokerages, including Motilal Oswal and Geojit, saw revenue drops of 20–30 per cent. Ceteris paribus, applying a 20 per cent contraction to Groww’s trailing-twelve-month topline implies PAT could fall to ₹1,200-1,300 crore from the estimated TTM profit of ₹1,860 crore. Such compression could trigger volatility in stock prices, as it occurred in 2008. This is Awhy a long-term perspective is required for investors buying into the IPO. For investors, this IPO offers entry into one of India’s few digital platforms that actually makes money, but it also demands realism. Groww 2.0 will probably begin where the broking boom ends. The test ahead is not to grow faster than peers but to mature better. Investors will need to track how Groww professionalises governance post-listing. The transition from a product-centric start-up to an institutionally accountable company will test whether its frugal engineering culture can coexist with public-market scrutiny. Published on November 4, 2025
