Stock broking and investment firm Groww is set to file confidentially for IPO with the markets regulator Sebi within the next two weeks, a couple of sources told Moneycontrol.
Meanwhile, the Bengaluru-based firm is raising $150 million in funding at a post-money valuation of $7 billion from Singapore-based asset management firm GIC.
The round is part of a larger $250-300million pre-IPO round, which nis expected to close within the next two weeks.
The regulatory process is expected to take 2-3 months for approval, post which Groww will file an updated DRHP with the latest quarterly financial statements, which will be made public.
According to one of the sources, the company is likely to go for the IPO at a conservative valuation of between $7-8 billion for a new-economy company with high growth potential, considering the market sentiment and volatility.
Groww, the country's largest stock broking firm by active investor base, has more than doubled its FY24 revenue to Rs 3,145 crore at a consolidated level. The company’s FY 25 numbers are not yet public and is likely to be part of the DRHP data.
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 top four brokers seeing a third straight month of decline in active investors.
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.
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