Groww files confidential DRHP with SEBI to launch IPO, targets $7-8 billion Valuation

Wealthtech unicorn Groww has confidentially filed for an initial public offering (IPO) under the Securities and Exchange Board of India's (SEBI) pre-filing mechanism in a significant move towards its public debut. This approach allows Groww to seek SEBI's feedback without disclosing its preliminary IPO documents to the public.

Notably, the fintech unicorn is raising $150 million from the Singapore-based sovereign wealth fund GIC as part of a larger $250–300 million pre-IPO financing round. This fundraising is expected to boost its post-money valuation to $7 billion.

Sources have indicated that Groww is likely to opt for a conservative IPO valuation ranging between $7-8 billion, factoring in current market sentiment and volatility. Based on a typical 10% equity dilution model, the IPO size could be between $700-800 million, making it one of the most anticipated public issues in India's fintech sector this year.

The company plans to list its equity shares with a face value of Rs 2 each on the main boards of the NSE and BSE. However, specific details such as the total issue size, components of the fresh issue, and the offer-for-sale breakdown remain undisclosed at this stage.

Groww's competitive landscape includes direct rivals like Zerodha and Upstox, with its offerings extending beyond stock broking to mutual funds and other financial products. The company was valued at $3 billion in its Series E funding round in 2021, backed by investors such as Tiger Global, Peak XV Partners, and Ribbit Capital.

Financially, Groww has demonstrated robust growth, with its FY24 consolidated revenue more than doubling to Rs 3,145 crore from Rs 1,435 crore in FY23. Meanwhile, operational profit increased by 17% to Rs 535 crore, though a one-time domicile tax of Rs 1,340 crore resulted in a net loss of Rs 805 crore.

The company recently relocated its registered office from Delaware, USA, to Bengaluru, India, potentially simplifying its regulatory framework and aligning its operations with domestic market practices. This strategic move is part of Groww's broader plan to solidify its position in the rapidly evolving Indian fintech landscape.

With the IPO filing, Groww embarks on a crucial phase to gain public and investor confidence in its growth trajectory while maintaining its competitive edge in the wealthtech industry. The market will closely monitor the company's next steps as it ventures into the stock market.