Groww shares deliver 70% returns from issue price: 4 Key factors fuelling its rally

SYNOPSIS: Groww has surged nearly 70 percent from its IPO price, driven by index inclusion, product innovation, bullish brokerage coverage, strong investor backing, and improving scale, despite regulatory headwinds and mixed year-on-year financial trends.

IPOs in India have gathered a huge crowd in 2025. The year kicked off with strong optimism, especially around new-age tech companies, and Dalal Street saw a steady rush of listings. As of 19th December 2025, as many as 101 IPOs had already hit the markets, up from 90 in 2024, with total funds raised touching an impressive ~Rs. 1.71 lakh crore.

From big names like LG Electronics, Swiggy and FirstCry to smaller yet notable players such as Studds Accessories, these listings not only showcased the strength of India’s startup ecosystem but also delivered eye-catching returns to early investors, running as high as 30x in some cases.

Amid this crowded IPO space, one name that continues to grab attention is Groww. Investor sentiment around the Groww IPO has been upbeat right from Day 1, and its market capitalisation has surged to such levels that even a combined comparison with NSDL, CDSL, and KFintech still falls short. Backed by an American seed accelerator, Y Combinator (YC), Groww has clearly maintained stronger momentum than several other YC-backed listed startups like Meesho, keeping it firmly in the market spotlight.

Stock Performance:

With a market cap of Rs. 1 lakh crores, shares of Billionbrains Garage Ventures Limited hit an intraday high at Rs. 166.9 on Monday morning trading session, up by more than 1 percent, as against its previous closing price of Rs. 165.4 on BSE.

Groww’s IPO opened from 4th to 7th November at an issue price of Rs. 100 per share, raising more than Rs. 6,600 crore through a mix of fresh issue and offer for sale (OFS). The stock made a strong market debut on Wednesday, 12th November 2025. On the NSE, Groww shares opened at Rs. 112, a 12 percent premium to the issue price, while on the BSE, it debuted at Rs. 114, up 14 percent.

The listing-day rally continued through the session, with the stock closing at Rs. 128.85 on the NSE, around 29 percent premium to the IPO price, and at Rs. 130.94 on the BSE, reflecting nearly 31 percent gain. Since its issue price, Groww has emerged as one of the standout performers of the current IPO cycle, delivering nearly 70 percent returns up to its today’s intraday high.

Following are a few factors that have supported the rally of Groww since its listing:

I. Entry into BSE Large Cap Index

Groww is set to officially enter the BSE Large Cap index effective 6th January 2026, alongside newly listed Lenskart Solutions. From the same date, Groww will also be included in the BSE Allcap, BSE Large MidCap, and BSE Financial Services indices, a move that is expected to significantly enhance the stock’s visibility and attract greater participation from both institutional and retail investors.

II. Launch of Groww Lite

Groww has also strengthened its platform resilience with the launch of “Groww Lite,” a web-based emergency trading portal that enables users to exit/close positions even if the main app or website faces outages. Built on a separate DNS infrastructure, Groww Lite bypasses Cloudflare and standard routing layers to ensure uninterrupted access. The initiative follows recent large-scale internet disruptions and is aimed at providing traders with a reliable fail-safe during critical market hours.

III. Jefferies Coverage

Jefferies had initiated coverage on Groww with a ‘buy’ rating and a 12-month target price of Rs. 180, valuing the company at 33x December 2027 EPS. The brokerage highlighted Groww’s rapid rise as India’s largest broker by active clients, despite entering the broking business only in FY21. Groww currently commands a 26 percent market share, significantly ahead of its nearest competitor at 16 percent, supported by its strong mutual fund funnel, mobile-first platform, and robust organic customer acquisition.

Jefferies believes Groww is well-positioned to deliver a 35 percent EPS (earnings per share) CAGR over FY26-FY28, driven by sustained market share gains in broking, rapid scaling of new initiatives such as margin trading and wealth management, and meaningful operating margin expansion.

The brokerage also noted that nearly 50 percent of client assets currently generate zero revenue, as they are largely invested in mutual funds, presenting a large cross-selling opportunity. To unlock this potential, Jefferies’ analysts expect Groww to replicate the high product velocity seen at US giant Robinhood by launching new offerings to convert non-paying users into revenue-generating customers. 

The brokerage added that Groww is evolving beyond a low-cost investing platform into a full-fledged financial supermarket, with newer businesses – including margin trading, wealth management, commodities, and loans against securities – expected to contribute around 20 percent of revenues by FY28, up from about 1 percent in FY25.

IV. Backed by marquee investors

Groww counts several marquee names among its backers, including Peak XV Partners, YC, and Microsoft CEO Satya Nadella. The company plans to utilise its IPO proceeds primarily for technology upgrades, brand building and business expansion initiatives.

According to Groww’s prospectus, Y Combinator (YC), which earlier held about 12.04 percent stake in the company, sold 2 percent, or nearly 10.5 crore equity shares, as part of the IPO. With the issue seeing strong oversubscription, YC is estimated to have realised around Rs. 1,055 crore from the sale, and now holds a 10.24 percent stake in the company.

In addition to YC, other prominent investors, including Peak XV Partners, Ribbit Capital, and Tiger Global, also trimmed their holdings, even as they continue to remain invested in the company.

Financial Performance & More

In Q2 FY26, Groww’s revenue was primarily driven by Equity Derivatives, contributing 57 percent of total income, followed by Stocks at 19 percent. Float income accounted for 7 percent, PL + LAS (Loans against security) for 6 percent, while Treasury and MTF each contributed 5 percent, with the balance coming from other income.

On the financial front, in Q2 FY26, Groww reported a revenue from operations of Rs. 1,019 crores, representing an increase of around 13 percent QoQ but a decline of over 9 percent YoY. Net profit stood at Rs. 471 crores, indicating a rise of around 25 percent QoQ and 12 percent YoY. Of the incremental 13 percent QoQ revenue growth, around 4.5 percent came from newly acquired users, while the rest was driven by existing users.

It is worth noting that Q2 FY25 included a one-time long-term incentive provision of Rs. 159.3 crore, which was later reversed in Q3 FY25 along with a similar provision from Q1 FY25. If we were to exclude this, adjusted for tax, the Profit After Tax would have been higher in Q2 last year and Q2 FY26 profits would have decreased 12 – 13 percent YoY, in-line with the revenue decline, which happened due to the “True-to-label” and Equity Derivatives’ regulations introduced last year. 

During the quarter, the company generated Rs. 471.3 crores in cash, although the closing cash balance declined by 6 percent. Management attributed this to reinvestment of earnings into scaling the MTF and credit (LAS) businesses, along with a Rs. 961 crore payout in Q2 towards the acquisition of Fisdom.

Regarding the Fisdom (Finwizard Technology Private Limited) acquisition, the transaction was completed in October 2025. While Fisdom has been consolidated into Groww’s Q2 FY26 balance sheet, its impact on the consolidated profit and loss statement will be reflected from Q3 FY26 onwards. Last year, Fisdom reported a topline of Rs. 166.3 crore.

In a nutshell, Groww’s sharp post-listing rally reflects strong investor confidence in its market leadership, expanding product ecosystem, and long-term growth potential. However, regulatory changes, revenue concentration in derivatives, and near-term earnings volatility remain key factors to monitor as the company scales newer businesses and integrates recent acquisitions.

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