Groww IPO Update: GIC Buys 2% Stake, DRHP Filed, Valuation Near $7B

Investment tech platform Groww is reportedly on track for its Initial Public Offering (IPO), with plans for a confidential filing of its Draft Red Herring Prospectus (DRHP) in the coming weeks. This move signifies a significant step towards the company's public debut, which is anticipated by the end of the fiscal year 2025-26.

Table of Contents:

1. Key Developments in Groww's IPO Journey
2. DRHP Filing and Regulatory Process
3. Lead Managers and IPO Structure
4. Financial Snapshot and Market Context

Key Developments in Groww's IPO Journey

Recent developments indicate Groww's accelerated progress towards its IPO. Singapore's sovereign wealth fund GIC has sought approval from the Competition Commission of India (CCI) to acquire a minority stake of over 2% in Groww. This proposed investment by GIC is part of a larger funding round aimed at bolstering Groww ahead of its listing. Reports suggest this pre-IPO round could value the company at around $7 billion.

As of 26 May, Investment tech platform Groww is advancing decisively towards its Initial Public Offering (IPO). The company has now confidentially filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), as indicated by a public notice on 25 May. This filing, made under its registered corporate entity Billionbrains Garage Ventures Ltd, targets an IPO size of $700 million to $1 billion. This move signifies a significant step towards the company's public debut, which is anticipated by the end of the fiscal year 2025-26, with sources suggesting a potential listing in the last quarter of the current calendar year.

DRHP Filing and Regulatory Process

The confidential filing of the DRHP allows companies to engage with SEBI on the filing without immediately making the document public. This is a common practice for companies preparing for an IPO. The DRHP contains crucial details about the company's financials, business operations, risks, and the terms of the proposed public issue.

The confidential filing of the DRHP, a route permitted under Regulation 59C(5) of the SEBI ICDR Regulations, allows companies to engage with SEBI on the filing without immediately making the document public. This is a common practice for companies preparing for an IPO. The DRHP contains crucial details about the company's financials, business operations, risks, and the terms of the proposed public issue. The equity shares will have a face value of ₹2 each and are intended for listing on both the NSE and BSE. It's important to note, as clarified in the public notice, that "The filing of the pre-filed DRHP shall not necessarily mean that the company will undertake the initial public offering."

Lead Managers and IPO Structure

While details about the IPO structure and the exact size of the offering will be outlined in the DRHP, it is anticipated that both a fresh issue of shares and an offer for sale (OFS) by existing shareholders will be included. Reputable investment banks are reportedly being engaged as lead managers for the issue to oversee the IPO process.

Financial Snapshot and Market Context

For the fiscal year 2024 (FY24), Groww reported an operating revenue of Rs 3,145 crore. However, the company also recorded a net loss of Rs 805 crore for the same period. This loss is reportedly attributed primarily to a one-time tax payout linked to its "reverse flipping" – the strategic move of shifting its domicile from the United States back to India in preparation for its domestic listing.

In conclusion, Groww's confirmed confidential DRHP filing, coupled with GIC's strategic investment and the ongoing CCI approval process, signals the company is making tangible progress towards its highly anticipated IPO, potentially raising $700 million to $1 billion. These developments not only highlight Groww's growth and increasing valuation but also underscore the robust investor confidence in India's digital investment platform sector, even as the company navigates aspects like its recent net loss due to strategic restructuring. As Groww navigates the final regulatory steps and market conditions, all eyes will be on its formal DRHP updates and the subsequent journey to becoming a publicly traded company, marking a significant milestone for the fintech unicorn and the broader Indian capital markets.

Also read our detailed Groww review with a full analysis of charges, features, and more to get the complete details: Groww Review