Shares of Billionbrains Garage Ventures Ltd, the parent company of the trading platform Groww, hit a 10% lower circuit for the first time after experiencing a decline in its six-day trading session. On Wednesday, the price band for the shares was adjusted downward to 10% from the previous limit of 20%.
It has been five days since Groww’s stock market debut, and the share price has nearly doubled from its initial public offering (IPO) price of ₹100. By the close of trading on Tuesday, the stock had surged nearly 94% from its IPO price. During Tuesday’s trading session, over 46 crore shares of Groww were exchanged, with only 8.24 crore marked for delivery.
As per Nuvama Alternative and Quantitative Research, approximately 149.2 million shares of the firm, representing 2% of the total equity, will be available for trading once the lock-in period concludes. A significant upcoming event for Groww is on Friday, November 21, when the company is set to release its quarterly results, marking its first financial disclosure since going public last week.
Between FY23 and FY25, Groww’s revenue increased from ₹1,141 crore to ₹3,902 crore, reflecting a compound annual growth rate (CAGR) of almost 85%. Meanwhile, profit after tax (PAT) surged from ₹458 crore to ₹1,824 crore. Additionally, EBITDA rose dramatically from ₹399 crore to ₹2,371 crore, showcasing a significant demonstration of operating leverage.
In terms of revenue, Groww’s figures are lower (FY25 revenue is ₹3,902 crore) compared to its competitors like Angel One ( ₹5,238 crore) and Zerodha ( ₹8,500 crore). However, Groww has the highest number of active clients (1.29 crore) among any platform, giving it an advantage over the other two.
Yet, when examining the average revenue per user, or ARPU, Groww falls behind both Angel One and Zerodha, whose ARPU is significantly over ₹10,000. The question arises: can Groww catch up with its competitors in the future? According to a CNBC-TV18 report, the management anticipates a revenue increase of 25 to 30% while costs are expected to rise by 15 to 20% in the coming years.
While Groww may currently trail behind its competitors in some areas, it has outstripped them in terms of overall value. At its peak during the day, Groww was valued at over ₹1.1 lakh crore, which is almost equivalent to the combined valuation of Angel One, Motilal Oswal, and Nuvama Wealth.
In a interview with CNBC-TV18, management highlighted plans to expand the MTF book, predicting that the MTF sector will eventually surpass the personal loan segment. With a strong growth outlook and diversification into new sectors, there is a possibility that Groww’s ARPU may also experience an increase as more clients are attracted to various offerings. Whether this will enable the company to narrow the gap with its peers remains to be seen, according to experts.
Groww share price today
Groww share price today opened at ₹188.58 apiece on the BSE, the stock touched an intraday low of ₹169.94 per share and an intraday high of ₹188.59. However, the stock is trading 89% higher than its issue price.
Prashanth Tapse, Senior Vice President of Research and Research Analyst at Mehta Equities, noted that the stock has already experienced a significant surge following its listing, and its current valuations seem to be becoming excessive. Tapse recommends that cautious investors consider taking partial profits at this stage.
Nonetheless, Tapse views Groww as a compelling long-term story and believes it can act as a representative for the increasing participation in India’s capital markets. Given that only 16-18% of Indians possess demat accounts and merely 5% engage in trading, there is substantial growth potential ahead.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.
About The Author
