Groww IPO: 10 Key Things To Know Before You Bid — Read Anand Rathi's Report

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Anand Rathi Report

Here are the 10 things to know before investing

1. Groww's parent company Billionbrains Garage Ventures Ltd. will launch its initial public offering on Nov. 04 and will conclude on Nov. 07.

2. A direct-to-customer digital investment platform has fixed the price band in the range of Rs 95 and Rs 100 per equity share.

3. Investors can place bids starting from a minimum of 150 shares and in multiples thereafter, requiring an investment of Rs 15,000.

4. The Rs 6,632.3 crore comprises a fresh issuance of 10.6 crore shares, worth Rs 1,060 crore, and an offer-for-sale (OFS) of 55.72 crore shares, amounting to Rs 5,572.3 crore.

5. Kotak Mahindra Capital Company Ltd., J.P Morgan India Pvt. Ltd., Citigroup Global Markets India Pvt. Ltd., Axis Capital Ltd., Motilal Oswal Investment Advisors Ltd. are the book-running lead managers for the public issue while MUFG Intime India Pvt. Ltd. is the registrar to the offer.

6. Angel One, Motilal Oswal Financial Services Ltd., One WAM Ltd., Nuvama Wealth Management Ltd., Prudent Corporate Advisory Services Ltd. are the other listed competitiors in comparison to Groww.

7. Objects of the Issue:

• Expenditure towards cloud infrastructure.

• Brand building and performance marketing activities.

• Investment in their Material Subsidiaries - Grow Creditserv Tech Pvt. Ltd. – a NBFC for augmenting its capital base and Grow Invest Tech Private Ltd., for funding MTF business.

• Funding inorganic growth through unidentified acquisitions and general corporate purposes.

8. Competitive Strengths:

• Groww” is a well-known and preferred brand for investing across cities, towns and villages in India.

• They have high customer retention, engagement and price in-elasticity.

• Customer-friendly design for enhancing investing experience.

• In-house technology stack to deliver a differentiated experience at low cost.

• Entrepreneurial and ownership-driven culture.

• Strong execution delivering growth and profitability.

9. Growth Strategies:

• Continue to strengthen their brand.

• Launch more products and services for both affluent and aspirational customers.

• Invest in technology.

• Pursue strategic acquisitions and investments.

10. Key Risk:

• Any downturn or disruption of the financial markets, which are affected by general economic, policy and market conditions in India and globally, may have a material adverse effect on their business and financial condition.

• Uninterrupted access to the company’s technology platform is essential to their business. System failures and interruptions could adversely affect the availability or performance of their website, mobile applications or platform, and thereby adversely impact their business, financial condition and results of operations.

• They derived 84.5% and 79.5% of their revenue from operations from their Broking services in Fiscal 2025 and in the three months ended June 30, 2025, respectively. Any downturn in customers’ willingness to use their Broking services could have an adverse impact on their business, financial condition and cash flows.

• Changing laws, rules and regulations may adversely affect their business, prospects and results of operations.

• The company’s success depends on their ability to acquire and retain customers on their platform. Any failure to do so could have an adverse impact on their operations, financial condition and results of operations.

• They incurred losses in Fiscals 2024 and generated profits in Fiscal 2023, Fiscal 2025 and in the three months ending June 30, 2025, and 2024, respectively. If they are unable to generate adequate revenue growth and manage their expenses and cash flows as they grow, they may not be able to sustain their profitability.

• They derive a significant portion of their revenue from operations from their Material Subsidiaries, Groww Invest Tech Private Limited and Groww Creditserv Technology Private Limited. Any downturn in their subsidiaries’ performance could have a material adverse impact on their business, financial condition, cash flows, and results of operations.

• Any actual or perceived cybersecurity, data or privacy breach could interrupt their operations and adversely affect their reputation, brand, business, financial condition and results of operations.

• The company’s Subsidiaries have incurred losses in the past and may continue to incur losses. Further, a portion of the Net Proceeds will be invested in Groww Creditserv Technology Private Limited. They may be required to continue providing financial support to these subsidiaries, which may adversely affect their consolidated results of operations and financial condition.

• They had negative cash flows from operations in the three months ended June 30, 2025, and in Fiscal 2025, and may continue to do so in the near term as they expand their business and enhance their products and services. Failure to generate sufficient cash from operations could adversely affect their liquidity and their ability to fund their operations.

Valuation and Outlook:

Founded in 2017, Billionbrains Garage Ventures (Groww) is a Bengaluru-based fintech company offering a direct-to-customer digital investment platform that enables retail investors to build wealth through a wide range of financial products and services.

The platform allows users to invest in mutual funds, stocks, F&O, ETFs, IPOs, digital gold, and U.S. equities. Its mobile app enjoys strong popularity, especially among mutual fund investors.

Additionally, Groww provides value-added offerings such as Margin Trading Facility (MTF), algorithmic trading, New Fund Offers (NFOs), and credit solutions.

Groww has been a leading player in India’s retail investing space and, according to Google Trends, recorded the highest search interest in the country among the top 10 brokers (by NSE active clients, as per NSE data) during Fiscal 2025.

Among active users who have completed three years on the platform, 77.7% have remained with Groww. The company has also demonstrated strong and consistent retention in the first quarter following customer acquisition, with rates ranging between 84.8% and 92.9% across cohorts from Fiscal 2022 to March 31, 2025.

Groww has developed most of its technology in-house, enabling the company to deliver a seamless and superior experience to its customers.

At the upper price band, the company is valued at 33.8x FY25 P/E, implying a post-issue market capitalization of Rs 6,17,360 million. Groww seeks to strengthen its pan-India brand by focusing on trust, transparency, and financial inclusion while expanding its customer base organically through word-ofmouth and operating leverage.

The company also plans to diversify its product suite with offerings like MTF, commodity derivatives, API trading, wealth management, LAS, and Bonds to enhance engagement, wallet share, and AARPU.

Considering these factors, the IPO appears fully priced and is rated “Subscribe – Long Term.”

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