Zerodha-rival Groww files IPO papers, aims for $1B listing
What's the story
Online investment platform, Groww, has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India(SEBI) to launch an initial public offering (IPO). The company hopes to raise between $700 million and $1 billion with this move. The IPO papers have been filed confidentially under Billionbrains Garage Ventures Ltd, Groww's registered corporate entity.
Regulatory route
IPO process and regulatory compliance
The company's IPO application is filed under Regulation 59C(5) of the SEBI ICDR Regulations, which permits confidential filing ahead of the formal DRHP. This approach is being increasingly adopted by tech companies looking for regulatory feedback before going public. However, it's worth noting that this pre-filing doesn't mean that Groww will go ahead with its initial public offering.
Pre-IPO funding
GIC's proposed investment in Groww
Singapore's sovereign wealth fund, GIC, has sought the Competition Commission of India's (CCI) approval to acquire a 2.14% stake in Groww through a special purpose vehicle, Viggo Investments. The investment is part of a larger pre-IPO funding round estimated to be between $250 million and $300 million, with GIC likely contributing about $150 million. The pre-IPO round could value Groww at $7 billion post-money, more than double its previous private market valuation of $3 billion in 2021.
Financials
Groww's financial performance and investor backing
In FY24, Groww posted an operating revenue of ₹3,145 crore but also recorded a net loss of ₹805 crore because of a one-time tax payout from its shift from the US to India. Founded in 2016, the company is backed by leading investors including Tiger Global, Peak XV (formerly Sequoia Capital India), Ribbit Capital, and Y Combinator.