Groww files updated draft papers for around ₹7,000 crore IPO

Mumbai: Online stock trading platform Groww has filed an updated draft red herring prospectus with the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO) of about ₹7,000 crore, according to the updated filings.

The company is looking to raise fresh capital of ₹1,060 crore, while ₹5,000-6,000 crore will be the offer for sale component with early investors selling in the IPO, two people aware of the matter told Mint.

Founders own 27.96% of the company and have filed as promoters of the company with a 20% lock-in for one and a half years from the time of listing. "In the IPO, they are offering to sell about 0.07% of the total shares of the company,” said the first person.

Groww has declined to comment on the matter.

“The company is likely to raise minor primary funding for growing its margin trade facility, unsecured lending and wealth management segment. It could also look at inorganic opportunities for these segments,” the second person quoted above said.

The size of the IPO has come down from what was initially expected, up to ₹8,300 crore. With this Groww joins a list of IPO-bound companies that have cut down their issue size over the past quarter.

Last month, Mint had reported that amid a crowded public listing pipeline, muted investor feedback, and lower-than-expected valuations, several companies like HDB Financial, Ather Energy and Bluestone, are trimming the offer-for-sale portion of their IPOs, lowering issue sizes.

Acquiring Fisdom

In May, Groww signed a definitive agreement to acquire wealth-tech startup Fisdom for around $150 million in an all-cash deal, Mint had reported.

In July, Viggo Investment Pte. Ltd., an investment entity of Singapore’s sovereign wealth fund GIC, approached the Competition Commission of India (CCI) for approval to acquire a 2.143% stake in Groww, Mint reported. Post the funding from GIC, the company was said to be valued at $7 billion.

In October 2021, Groww last announced a $251 million series E round at a $3 billion valuation. The company has raised a total of $393.3 million in funding so far.

Groww's profit jumped over threefold in FY25 to ₹1,819 crore. The Bengaluru-based startup had registered a profit of ₹545 crore in FY24. The company's revenue rose to ₹4,056 crore, a 31% increase over FY24.

The stock trading platform had earlier filed its draft IPO papers on 21 May. All firms going through this route need to file an updated DRHP.

It had picked banks including JPMorgan Chase & Co. and Kotak Mahindra Bank Ltd. In March, the company issued compulsorily convertible preference shares as bonus to existing investors, including Peak XV and Ribbit, Mint reported.

Groww was founded in 2016, and the process to move its base from Delaware began two years ago. The company relocated its parent entity, Groww Inc, from Delaware, US, to Bengaluru, effectively making Groww's primary Indian company, Billionbrains Garage Ventures, the parent firm.

Last week, edtech company PhysicsWallah filed an updated DRHP for an IPO after Sebi asked for certain changes in the initial filing through the confidential route.