Billionbrains Garage Ventures, parent company of trading platform Groww, plunged 8% on Thursday, marking second consecutive day of losses. On Wednesday, the stock hit 10% lower circuit.
The stock fell 10% on Wednesday after surging for five consecutive sessions following its listing, during which it had climbed to 90% above its issue price of ₹100 per share.
As of Wednesday’s market close, more than 1.6 crore Groww shares were queued as pending sell orders on the NSE at the lower circuit limit.
The company will also be announcing its first quarterly results on Friday, November 20.
Another significant milestone will follow on December 10, when the one-month shareholder lock-in period expires.
Should you buy or sell?
Accoridng to Nitin Jain, Sr. Research Analyst at Bonanza, Groww‘s stock has seen a sharp run-up post-listing, taking its valuation well above those of many traditional capital market peers, raising questions around valuation comfort relative to the rest of the sector.
“Its implied P/E multiple at IPO was estimated around 33–37x, which is elevated compared to established players like Motilal Oswal, and Angel One, most of whom trade at notably lower multiple. Currently Groww is trading at PE of 61x where as its peers Motilal Oswal (29x), Angel One (33x), Nuvama Wealth (26x), IIFL Wealth which is far below Groww’s current valuation.
The stock is now valued at over ₹1 lakh crore, outpacing several older capital market companies,” Jain said.
He further explained that the company has certainly run well ahead of most listed capital market players on valuation, justified mainly on the promise of digital scale and future product expansion.
“For value-oriented investors, current levels might demand caution, while growth-focused believers could still justify the premium if longterm projections are met,” he added.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
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