Zerodha-rival Groww is preparing for $700M IPO: Report
What's the story
Bengaluru-based stockbroking giant Groww is in talks with a number of investment bankers for its initial public offering (IPO), according to Moneycontrol.
The company plans to raise around $700 million through the offering, with a valuation of somewhere between $7 billion and $8 billion.
However, the IPO's timeline is yet to be confirmed and will depend on market conditions.
Strategic relocation
Strategic shift to India precedes IPO plans
The IPO announcement comes after Groww strategically moved its holding company from the US to India.
The move is in line with a trend among top fintech firms, who are moving their bases back to their home countries owing to favorable economic policies and a growing domestic market.
The decision was taken less than a year ago, making a significant step in the company's growth strategy.
Regulatory impact
IPO plans amid SEBI's new regulations
Groww's decision to go public comes at a time when Indian stockbrokers are grappling with the Securities and Exchange Board of India (SEBI)'s recent move to limit Futures and Options trading.
The action, taken in response to speculation by small retail traders, led to a 30% decrease in F&O trading last December.
Despite the changes, Groww continues its journey toward an IPO, showing resilience in the face of regulatory shifts.
Market dominance
Groww outperforms rivals in active investor count
In the race for active investors, Groww has left its competitor Zerodha far behind. As of November 2024, the company had added over 50 lakh users, more than double its last year's figure.
This surge has only widened Groww's lead over rivals like Zerodha and Angel One.
As per December 2024 data from market exchanges, Groww has around 1.3 crore active investors on its platform, much more than Zerodha's 81 lakh and Angel One's 78 lakh active investors.
Financial outlook
Financial performance and future prospects
Groww reported a 17% increase in its consolidated operational profit for the year ending March 2024, which rose to ₹535 crore from ₹458 crore the previous year.
Due to a one-time domicile tax of ₹1,340 crore for relocating from Delaware in the US to Bengaluru, the company posted a net loss of ₹805 crore at the consolidated level.
Despite the setback, Groww's IPO plans reflect optimism about its future prospects in India's financial market.