Groww sees profit booking: Stock hits 10% lower circuit after nearly doubling over IPO price in five sessions

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26 Aug, 2025 12:21

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The shares of Billionbrains Garage Ventures, the parent company of leading stock broking platform Groww, dropped 10 percent to hit the lower circuit on  November 19. This comes as investors may have resorted to profit booking after a stellar surge post market debut.

The shares of the company made a decent debut on stock markets on November 12, listing with a premium of 14 percent over the IPO price at Rs 114 apiece on BSE. The stock then surged around 94 percent from its IPO price in just five sessions to hit a high of Rs 193.91 apiece.

The stock was locked in the 10 percent lower circuit at Rs 169.94 apiece in the morning trading hours of Wednesday.

Here's what analysts say:

Groww's sharp run-up post-listing has taken its valuation well above those of many traditional capital market peers, raising questions around valuation comfort relative to the rest of the sector, said Nitin Jain, Senior Research Analyst at Bonanza.

“Its implied P/E multiple at IPO was estimated around 33–37x, which is elevated compared to established players like Motilal Oswal, and Angel One, most of whom trade at notably lower multiple. Currently Groww is trading at P/E of 61x where as its peers Motilal Oswal (29x), Angel One (33x), Nuvama Wealth (26x), IIFL Wealth which is far below Groww’s current valuation,” he noted.

'Valuation outpaced several older capital market companies':

Nitin Jain added that the stock's valuation of over Rs 1 lakh crore has outpaced several older capital market companies. "Groww has certainly run well ahead of most listed capital market players on valuation, justified mainly on the promise of digital scale and future product expansion. For value-oriented investors, current levels might demand caution, while growth-focused believers could still justify the premium if long-term projections are met," he added.

Master Capital Services had noted that the brokerage industry can expect some near-term headwinds based on recently announced SEBI policy adjustments and regulatory changes. However, it believes that the long-term trend of financialisation and growing retail participation in the Indian capital markets should suggest a strong backdrop of opportunity.

“Despite strong growth, concerns around high valuation multiples, margin pressures, and regulatory risks in the fintech/brokerage space weighed on cautious investors. The IPO attracted significant institutional participation, driven by expectations of further market share gains from traditional brokers, strong customer additions, and improving operating leverage. Investors/traders allotted shares may book part profit and hold the remain for the medium to long term with stoploss of 80,” said Shivani Nyati, Head of Wealth at Swastika Investmart.

'Consider accumulating Groww shares on dips':

Prashanth Tapse from Mehta Equities however advised non-allotted investors to consider accumulating Groww and monitor the stock post-listing, and consider adding on any meaningful dip. He added that allotted investors should hold the stock for the long term, given the company’s structural strengths and growth potential, while acknowledging short-term market risks.

Groww is set to release its first quarterly results post market debut on November 21.

Groww faces 30 lakh-share auction:

NSE data on Tuesday showed that more than 30 lakh shares of Groww-backed Billionbrain Garage Ventures had moved into the auction window, a scale analysts described as unusually large.

The development underscores how a wave of short sellers appear to have misjudged the stock’s sharp post-listing momentum. Expecting the rally to cool quickly, several traders sold shares they did not hold, assuming they could repurchase them at lower prices the same day. Instead, the stock continued to climb, leaving many unable to arrange delivery on the settlement date and forcing a substantial quantity into the auction segment, analysts said.

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Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.