Groww Confidentially Files Draft Papers For IPO

Stock broking platform Groww has become the latest company to pre-file the draft papers for its initial public offering confidentially, the company said on Sunday.

The draft red herring prospectus, filed with the regulator on May 24, looks to list the Bengaluru-based firm on both the National Stock Exchange and BSE, with shares having a face value of Rs 2 each.

"The filing of the pre-filed draft red herring prospectus shall not necessarily mean that the company will undertake the initial public offering," Groww said in a newspaper announcement.

NDTV Profit had earlier reported that the firm plans to raise about $1 billion through the IPO, which will include a mix of a fresh issue and an offer for sale, with early backers likely participating in the OFS process.

Groww's early investors include Tiger Global, Peak XV Partners, Ribbit Capital, YC Continuity and Propel Venture Partners.

Prior to the filing of the DRHP, Groww was in the process of raising up to $150 million from GIC as part of a large pre-IPO round, according to people aware of the deal. An IPO after this round can value the company at up to $8 billion.

The fintech major began in 2016 as a mutual fund investing platform and expanded its offerings by introducing stocks, IPOs, and ETFs in 2020. The platform was valued at $3 billion in its last funding round in 2021, which was led by Iconiq Growth, along with other investors like Alkeon, Lone Pine Capital and Steadfast.

Earlier in March, the fintech major had signed a definitive agreement to acquire wealth management company Fisdom for approximately $150 million, or around Rs 1,280 crore, in an all-cash deal. Its completion is likely to bolster Groww's capabilities and expand its offerings in the wealth management sector. This will be the company's second largest acquisition after the Indiabulls AMC deal in May 2023.

With this, Groww becomes the latest in a growing line of companies that have gone through the pre-filed confidential route. The DRHP is released only when the company decides to go live with its IPO. A confidential filing allows a company to protect what it believes to be sensitive data from its competitors.

This is an optional mechanism where companies file for their IPO without disclosing their draft red herring prospectus to the public. SEBI enabled this in December 2022, and Tata Play Ltd. was the first company to make use of it.

Earlier this month, logistics firm Shiprocket also filed its draft papers through the confidential route. Last month, upper-layer non-banking financial company Tata Capital followed the same process, joining the likes of edtech major Physicswallah, EQT-backed Indira IVF, Swiggy Ltd., Credila Financial Services Ltd. and Vishal Mega Mart Ltd.

Usually, a confidential IPO filing process is more time-consuming compared to the traditional process and comes with higher advisory and legal fees. However, the filing of a pre-filed DRHP does not necessarily mean that the company will undertake the initial public offering.