Groww Files Confidential IPO Papers With SEBI

Investment tech startup Groww has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) through a confidential pre-filing route.

In a newspaper announcement, Groww said, “This public announcement is being made pursuant to Regulation 59C(5) of the SEBI ICDR Regulations to inform the public that the company has filed the Pre-filed Draft Red Herring Prospectus with SEBI and the Stock Exchanges, under Chapter IIA of the SEBI ICDR Regulations in relation to the proposed initial public offering of its equity shares on the main board of the stock exchanges.”

While the size of the IPO wasn’t disclosed in the advertisement, an ET report estimated that the offering could be in the range of $700 Mn to $1 Bn. Earlier reports had suggested that the IPO could be at a “conservative” valuation of $7-8 Bn.

The advertisement also clarified, “The filing of the Pre-filed Draft Red Herring Prospectus shall not necessarily mean that the Company will undertake the initial public offering.”

With this move, Groww joins the likes of Shiprocket, boAt and PhysicsWallah (PW) in using the confidential pre-filing route. This approach allows companies to delay public disclosure of IPO details until the later stages of the process.

According to the ET report, Groww is also planning a pre-IPO funding round in the range of $250-300 Mn, with Singapore’s sovereign wealth fund GIC expected to contribute around $150 Mn. Existing investor Tiger Global is also likely to participate in this round.

The report further mentioned that this upcoming round would likely value Groww at around $7 Bn, more than double its last valuation of $3 Bn during its 2021 Series E fundraise.

GIC has already sought approval from the Competition Commission of India (CCI) to acquire a 2.14% stake in Groww through a special purpose vehicle, Viggo Investments.

Groww is also looking to expand its offering ahead of the IPO. It entered into a definitive agreement to acquire wealthtech startup Fisdom in an all-cash deal, which values Fisdom at about $150 Mn.

The company has been settling its long-pending cases with SEBI. Recently, it paid INR 34.1 Lakh to settle a case that originated from a technical glitch and paid INR 47.85 Lakh to settle another case pertaining to the violation of stock brokers regulations.

Founded by Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal, Groww started in 2017 as a direct mutual fund investment platform and has since expanded into stock trading, futures & options, IPOs, and other financial products. It also runs an asset management business and is reportedly looking to enter the wealth management space under a separate brand, ‘W’

On the financial front, Groww reported a net loss of INR 805 Cr in FY24. Despite the loss, Groww’s total revenue surged by 119% to INR 3,145 Cr during the same period.

In the investment tech space, Groww competes against the likes of Zerodha, Angel One, CRED, and now, MobiKwik. In the broader fintech market, it locks horns with Moneyview, PhonePe, Razorpay, among others, which are also ramping up their IPO preparations.