Modest Gains Expected Despite Initial Enthusiasm
The grey market premium (GMP) for the online investment platform Groww has experienced a sharp decline, falling nearly 70% from a peak of Rs 16 to around Rs 5 before its official listing. This translates into a modest 5% premium over the IPO price of Rs 402 per share, reflecting cautious investor sentiment, particularly in the wake of Lenskart’s weak market debut.
Prashant Tapse of Mehta Equities told Economic Times, “We expect Groww to list with a modest 5–10% gain, supported by positive market sentiment, but exuberance is likely to be capped due to recent weak debuts like Lenskart.”
IPO Demand: Strong But Mixed
Groww’s Rs 2,580 crore IPO attracted strong investor interest, with overall subscription reaching 17.6 times. Qualified Institutional Buyers led the charge with a 22x subscription, followed by non-institutional investors at 14.2x, and retail investors at 9.4x.
Despite this robust response, the steep drop in GMP indicates tempered expectations for listing-day gains. Nitin Jain, senior research analyst at Bonanza, noted, “The pre-listing quote (GMP) for Groww IPO was reported around Rs 6.5 to Rs 17.25 above the IPO price band, with different sources showing variation shortly before listing.”
Groww’s Growth Story
Founded in 2017 and headquartered in Bengaluru, Groww has emerged as one of India’s leading fintech platforms. Its app provides access to mutual funds, stocks, derivatives, ETFs, and IPOs, all from a single interface. With over 10 crore registered users, Groww has expanded rapidly, particularly in smaller cities.
Financially, Groww reported a net profit of Rs 1,824 crore in FY25 on revenues of Rs 4,061 crore, marking a 45% growth in topline and a significant turnaround from previous losses. However, with an implied valuation of around 40 times FY25 earnings, analysts suggest the stock is already fully priced.
Analyst Insights: Medium to Long-Term Potential
According to Tapse, the IPO was “fairly priced in the Rs 95–100 range” and attracted strong institutional interest due to Groww’s scalable digital model and low operational costs. He recommended investors hold the stock for the medium to long term, adding, “Groww represents a strong long-term structural story and can act as a proxy for India’s expanding capital market participation.”
Use of IPO Proceeds
The public issue comprised fresh equity aimed at strengthening Groww’s balance sheet and technology infrastructure. Proceeds will be used for corporate purposes, product development, and potential acquisitions.
Outlook: Limited Near-Term Upside
As Groww prepares to enter the market, all eyes are on whether its strong fundamentals and trusted brand can offset the current softness in new-age listings. Analysts predict a small positive listing, but caution that near-term upside may remain limited.
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