Groww: India’s Leading Stock Broking Platform Files Draft Red Herring Prospectus

Groww, recognised as the largest stock broking platform in India, has submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) via the confidential route, as indicated in public notices published on May 25.

The pre-filing mechanism implemented by SEBI in 2022 allows organisations to privately lodge their DRHPs. This document remains undisclosed until the company opts to go public, which offers greater flexibility in planning its initial public offering (IPO).

Market Leadership and User Base

Groww boasts over 13 million active users each month, as per data from the National Stock Exchange (NSE). In February 2024, it secured a commanding 26.57% market share, outpacing competitors such as Zerodha at 16.25% and Angel One at 15.62%.

Financial Backing and Valuation

Supported by notable investors including Peak XV Partners, Tiger Global, Ribbit Capital, and Y Combinator’s Continuity Fund, Groww has successfully raised approximately $400 million thus far. Its most recent funding round involved a $251 million Series E in October 2021, which established its valuation at $3 billion.

Upcoming Fundraising Plans

The organisation is now aiming to secure $200 million in a pre-IPO fundraising effort, with a valuation target set between $6.5 and $7 billion. In line with this, Viggo Investments Pte Ltd has requested clearance from the Competition Commission of India (CCI) to acquire a 2.143% equity stake in Groww.

Financial Performance

On the financial side, Groww registered a revenue from operations of Rs 3,145 crore in FY24. However, the firm recorded a net loss of Rs 805 crore, primarily due to a one-time tax expense of Rs 1,340 crore related to its redomiciliation to India.

Industry Trend towards Confidential Filings

Numerous Indian startups have recently embraced the confidential filing route introduced by SEBI in 2022 as they prepare for their public listings. This trend includes companies such as car marketplace CarTrade, logistics provider Delhivery, Shiprocket, and consumer electronics brand boAt.