Iconiq to pump in $150 million in Groww in pre IPO round at $7 billion valuation

Groww to raise $300 million funding at $7 billion

US-based investment firm Iconiq Capital is likely to pump in $150 million in broking firm Groww’s pre-IPO funding round of $300 million at a $7 billion valuation, according to sources familiar with the matter.

The Series F funding round comes a few months ahead of the company’s potential listing process.

Groww declined to comment on Moneycontrol’s queries regarding the funding.

Groww, the country’s largest stockbroker by active investors, on May 26 confidentially filed for an initial public offering under the Securities and Exchange Board of India’s pre-filing mechanism, marking its first formal step toward a stock market debut.

The markets regulator SEBI is expected to decide on Groww’s IPO within 2-3 months.

On May 15, Singapore-based GIC sought the Competition Commission of India (CCI) for permission to invest in Groww at a post-money valuation of $7 billion. Iconiq is likely to file the application with CCI soon, the sources said.

As per the sources, Groww is likely to take a conservative IPO valuation of $7-8 billion, considering the market sentiment and volatility.

Based on the valuation, a typical 10-15 percent equity dilution could imply an IPO size of around $700-920 million. Details such as total issue size, fresh issue component, and offer-for-sale breakdown have not been disclosed yet.

Robust growth

Bengaluru-based wealth-tech firm competes with Zerodha and Upstox in online discount broking and offers mutual funds and other financial products. It was last valued at $3 billion in 2021 during its Series E round. Its key backers include Tiger Global, Peak XV Partners, and Ribbit Capital.

Groww has around 1.3 crore active investors, far ahead of Zerodha and Angel One, with 78 lakhs and 75 lakh active investors, respectively.

Groww has more than doubled its FY24 revenue to Rs 3,145 crore at a consolidated level. The company’s FY25 numbers are not yet public but are likely to be part of the updated DRHP.

Its consolidated operational profit rose 17 percent to Rs 535 crore in the year ended March 2024, compared with Rs 458 crore it had reported a year back. Its consolidated revenue for FY23 stood at Rs 1,435 crore.

The one-time domicile tax of Rs 1,340 crore resulted in Groww posting a Rs 805-crore net loss at the consolidated level. Groww has moved its registered office from Delaware in the US to Bengaluru during the last fiscal.

Tough times for brokers

Groww’s IPO process is starting at a difficult time for most brokers, as a few regulations have hurt the industry. The negative investor sentiment has also resulted in all four top brokers seeing a third straight month of decline in active investors in April.

Groww saw around 75,000 fewer active investors in April, while the second-largest broker, Zerodha, saw its active investor base decline by more than 55,000 users.

For Bengaluru-based Zerodha, which pioneered the discount broking/zero brokerage model in India, this was the fifth consecutive month of decline in active investors. Broking firms are bracing for higher taxes on trading, lower exchange rebates, and stricter restrictions on retail futures and options trading since late last year. Most broking firms could see a 30-50 percent hit to the topline during the second half of FY 25.

Angel One, which is listed in the markets, reported a 49 percent fall in net profit for the three months ended March 31, 2025, to Rs 175 crore, compared to Rs 340 crore reported in the corresponding quarter in FY2024. Consolidated revenue sank 22 percent to Rs 1,056 crore, sinking from Rs 1,357 crore posted in the same period last year.