Groww IPO Fully Subscribed; Strong Retail and Non-Institutional Investor Demand on Final Day

Groww's Initial Public Offering (IPO) saw robust investor demand, reaching an oversubscription of 3.52 times by the final day of bidding, with bids for 128.5 crore shares against 36.48 crore shares on offer. Retail Institutional Investors (RIIs) were particularly enthusiastic, oversubscribing their quota by 7 times. Non-Institutional Investors (NIIs) also showed strong interest, with their portion being oversubscribed 5.65 times. Qualified Institutional Buyers (QIBs), initially showing muted interest, picked up pace towards the end, subscribing their portion 1.2 times. The company has set a price band of INR 95 to INR 100 per share, valuing it at approximately INR 61,735 crore ($7 billion) at the upper end. The IPO comprises a fresh issue of INR 1,060 crore and an offer-for-sale (OFS) component. Prominent investors like Tiger Global, Peak XV Partners, and Sequoia Capital are among those selling shares through the OFS. Groww had previously raised INR 2,984.5 crore from anchor investors, including Goldman Sachs and the Government of Singapore. The capital raised from the fresh issue is intended for marketing, bolstering its NBFC arm, investing in its margin trading subsidiary Groww Invest Tech, and funding cloud infrastructure and potential acquisitions.

Financially, Groww reported a net profit of INR 378.4 crore in Q1 FY26, a 12% increase year-on-year, though operating revenue saw a slight decrease of 9.6% to INR 904.4 crore. For the full fiscal year FY25, the company posted a significant net profit of INR 1,824.4 crore, a substantial turnaround from a loss in the previous year, with operating revenue growing by about 50% to INR 3,901.7 crore.

Impact: This strong investor demand signals considerable confidence in Groww's business model and the potential of the Indian fintech sector. A successful listing could lead to positive market sentiment, benefiting Groww's stock performance and potentially influencing investor interest in other fintech companies. Rating: 7/10.

Difficult Terms: IPO (Initial Public Offering): The process by which a private company first sells shares of stock to the public, allowing it to raise capital. Oversubscribed: When the demand for shares in an IPO exceeds the number of shares offered for sale. Retail Institutional Investors (RIIs): Individual investors who invest smaller amounts in an IPO. Non-Institutional Investors (NIIs): Investors who bid for shares above the RII limit but are not Qualified Institutional Buyers (QIBs), typically high-net-worth individuals or corporate bodies. Qualified Institutional Buyers (QIBs): Large institutional investors such as mutual funds, pension funds, and insurance companies. Price Band: The range within which the company offers its shares during an IPO. Fresh Issue: When a company issues new shares to raise capital. Offer-for-Sale (OFS): When existing shareholders sell a portion of their holdings in the company. Anchor Investors: Institutional investors who commit to buying shares before the IPO opens to the public, providing early support. NBFC (Non-Banking Financial Company): A financial institution that provides banking-like services but does not hold a full banking license. Subsidiary: A company controlled by another company, known as the parent or holding company. Cloud Infrastructure: The hardware and software components that provide the foundation for cloud computing services. Inorganic Growth: Business expansion achieved through acquiring or merging with other companies. Acquisition: The act of one company taking over another company. FY (Fiscal Year): A 12-month period that a company uses for financial reporting, which may not align with the calendar year. Q1 (First Quarter): The first three-month period of a company's fiscal year. Net Profit: The profit a company has left after deducting all expenses, taxes, and interest. Operating Revenue: The total income generated from a company's primary business operations.