Groww’s ₹6,600 Crore IPO: Can India’s Digital Investing Giant Justify Its Premium?

Billionbrains Garage Ventures Ltd, the parent company of investment platform Groww, has set the stage for one of the most anticipated listings of the year, raising approximately ₹6,632.30 crore, including both the fresh issue and the offer for sale.

Founded in 2017 by former Flipkart executives Lalit Keshre, Harsh Jain, Ishan Bansal, and Neeraj Singh, Groww is a Direct-to-Customer (D2C) digital investment platform. Revenue is primarily generated from brokerage income and distribution commissions. It offers a variety of options, including stocks, derivatives, mutual funds, ETFs, and digital gold. They also provide Margin Traded Facility (MTF) and credit through their NBFC subsidiary. It has over 1.29 crore active NSE clients and a total customer base of over 1.7 crore users.

Structure of the offer:

➢   A fresh issue of approximately 1060 crores.

➢   An offer for sale amounting to 5572.30 crores. This is driven by shareholders and early investors, including Peak XV Partners, Ribbit Capital, and Y Combinator, who are selling only a portion of their investments. Notably, the company’s founders are selling a minimal number of shares as part of this issue.

➢   The company has set the price band between 95 and 100 per equity share. The company is valued at 61,736 crores at the upper end of the price band.

This issue is a 100% Book-Built Offer, and the IPO opens on November 4^th, 2025, closes on November 7^th, 2025, and lists on November 12^th, 2025.

Key Financial Metrics:

➢   Revenue from operations surged to ₹ 3,901 crores in FY25, which is almost a 49% year-over-year increase.

➢   The company reported a Profit after tax (PAT) of 1824 crores, which is a dramatic reversal from an 805 crore loss in FY24 (which happened due to a one-time tax payment of 1339 crores)

➢   The adjusted EBITDA margin climbed to 59.11% in FY25, which is significantly higher than the global average. Furthermore, the company reported a Return on Net Worth of 37.57%.

➢   As of 6^th November 2025, the share is trading at a ₹13 Premium over the price

Risks:

➢   The IPO is priced at a premium valuation compared to its competitors, such as Angel One Ltd. and Motilal Oswal Financial Services Ltd. This places significant pressure on the company to maintain a high, consistent growth trajectory to justify its high valuation.

➢   The digital investment space is getting highly competitive. If the company fails to maintain its competitive edge in the market, new players could capture customers, thereby impacting the company's margins.

➢   The business is subject to extensive regulatory requirements by SEBI and RBI. Any significant change (new costs or laws regarding the derivatives/F&O/F&O segment) could impact the business's operations.

Market Outlook:

According to analysts like Anand Rathi Research and Bonanza, the company has strong fundamentals, market leadership, high user growth, and retention, with 12.6 million active clients, and strong profitability.

The post-IPO valuation is pegged at approximately 34x to 44x times its FY25 earnings, which is almost double that of its competitor, Angel One (20x-21x). This limits the potential for long-term financial gains. The company also heavily relies on brokerage income (around 80% of revenue). Diversification into lending and wealth management can be crucial for long-term growth.

Diversification Strategy:

Groww is heavily reliant on its brokering service, which accounts for nearly 80% of the revenue. The brokering business is highly volatile due to market activity and regulatory changes, as the SEBI and the RBI closely monitor the F&O/F&O/derivative segment.

To mitigate this risk, the company is entering the wealth management and lending businesses. The primary objective of this diversification strategy is to reduce its sole dependence on the brokering business and also open up new revenue streams. The long-term value of the company will depend on how it manages its new operations and maximises its value.

Conclusion:

The Groww IPO can be a defining moment in India’s digital finance industry, reflecting confidence in digital infrastructure and financial literacy. The company’s fundamentals, leading market share, exceptional profitability, and a technology-first approach make it a trusted investment for its investors.

While the valuation still seems unjustified, the offer remains an attractive option for those who believe in long-term investment. The recent expansion of the company into wealth management and lending services can prove to be beneficial for the company.

Disclaimer: The information presented in this article is for educational and informational purposes only. It should not be construed as financial, investment, or legal advice. The views expressed are based on publicly available information and are not recommendations to buy, sell, or hold any securities. Readers are advised to conduct their own research or consult a qualified financial advisor before making any investment decisions.

Authored by: Aryaveer Batra