Groww IPO Premium Falls 70% as Market Sentiment Cools
The grey market premium for Indian investment platform Groww has declined sharply by nearly 70%, falling from Rs 16 at its peak to approximately Rs 5 before listing. This represents a modest 5% premium over the initial public offering price of Rs 402 per share, reflecting cautious investor sentiment following recent weak market debuts.
Market analysts expect Groww to achieve modest listing gains of 5-10%, supported by positive market conditions but tempered by recent disappointing performances from other technology companies entering public markets.
Strong Subscription Despite Premium Decline
Despite the falling premium, Groww's Rs 2,580 crore IPO demonstrated robust demand with an overall subscription rate of 17.6 times. Qualified institutional buyers led participation with 22 times subscription, followed by non-institutional investors at 14.2 times and retail investors at 9.4 times.
The steep decline in grey market premium indicates that investors are moderating expectations for immediate listing gains, adopting a more conservative approach to new technology offerings.
Company Fundamentals Remain Strong
Founded in 2017, the Bengaluru-based financial technology platform has established itself as a leading provider of investment services in India. The company offers access to mutual funds, stocks, derivatives, exchange-traded funds and initial public offerings through a single digital application.
With over 100 million registered users, Groww has experienced rapid expansion, particularly in smaller urban centres across India. The platform has benefited from increasing retail investor participation in capital markets.
Financially, the company reported net profit of Rs 1,824 crore in fiscal year 2025 on revenues of Rs 4,061 crore, marking a 45% increase in revenue and representing a significant turnaround from previous losses.
Valuation Concerns
With an implied valuation of approximately 40 times fiscal year 2025 earnings, market analysts consider the stock fully priced at current levels. The valuation reflects the company's growth trajectory but leaves limited room for immediate appreciation.
Industry experts view the IPO as fairly valued and note strong institutional demand driven by the company's scalable digital business model and operational efficiency. The recommendation for investors is to maintain positions for medium to long-term gains.
The entire public issue comprises fresh equity aimed at strengthening the company's balance sheet and technology infrastructure. Proceeds will support corporate purposes, product development and potential acquisitions.
Market observers will monitor whether Groww's established fundamentals and brand recognition can offset prevailing weakness in technology sector listings, with expectations set for modest positive performance but limited near-term upside potential.