Should Retail Investors Subscribe to Groww IPO?

India’s most popular self-guided investing app has finally made its move. Groww, operated by Billionbrains Garage Ventures Pvt Ltd, opened its initial public offering today. Everyday investors and market watchers alike await this IPO with high expectations. In this article, I’ll walk through everything you need to know: the offer details, the business model, the recent financials, valuation, grey-market cues, strengths, risks, and ultimately—whether you as a retail investor should hit “Apply.”

IPO Snapshot: Key Details

• Price band: ₹95 to ₹100 per share.
• Issue size: ₹6,632.30 crore total. That breaks down into a fresh issue of ₹1,060 crore and an offer-for-sale (OFS) of ₹5,572.30 crore by existing shareholders.
• Bidding window: Opens November 4, 2025 and closes November 7, 2025.
• Expected allotment date: Around November 10. Expected listing: November 12 on both BSE and NSE.
• Allocation break-up: At least 75% of the issue goes to QIBs (qualified institutional buyers), up to 15% to NIIs (non-institutional investors), and up to 10% to the retail portion. The lot size stands at 150 shares.
• Use of proceeds (fresh issue): Groww intends to spend funds on brand-building and performance marketing, upgrade its cloud infrastructure, pursue acquisitions/inorganic growth, and provide capital to its lending and margin-trading subsidiaries (Groww Creditserv, Groww Invest Tech).
• Anchor book: Ahead of the opening, investors allocated to the anchor portion bid roughly ₹50,000 crore on an anchor size of about ₹3,000 crore—meaning near 15× oversubscription. The company successfully raised around ₹2,984 crore from anchor investors.

Understanding the Business

Groww operates a direct-to-consumer investing platform. It enables users to trade equities and derivatives, invest in mutual funds, ETFs, bonds, and apply to IPOs—all within one app. As of June 2025, Groww counted about 12.6 million active clients on the NSE side and held roughly a 26% share of the retail broking market in India. That makes it the largest stockbroker in India by this metric.

The company grew through a combination of simple onboarding, minimal friction, strong word-of-mouth, and a user-friendly interface. According to company disclosures, over 80% of its new users get onboarded organically, and it maintains a three-year retention rate of 77%. During the financial year ended March 2025, it processed approximately ₹34,000 crore of SIP (systematic investment plan) inflows, which represent about 11.8% of the entire industry’s SIP flow.

Recent Financial Performance

Here’s a snapshot of recent financials:

• For FY24: Revenue stood at around ₹3,145 crore. The operating profit reached approx. ₹545 crore. However, the company posted a net loss of about ₹805 crore. That loss happened because of a one-time tax charge of about ₹1,340 crore (related to a reverse-flip restructuring).
• For FY25: Revenue ranged between roughly ₹3,902 crore and ₹4,056 crore. The company reported positive net profit of around ₹1,819–₹1,824 crore—more than triple the prior year.
• For Q1 of FY26: Revenue came in around ₹904 crore, and net profit roughly ₹378 crore—signs of continued momentum into the current year.

These results indicate that Groww has moved from a loss structure into a profitable model, leveraging its scale. When a broking platform with this reach crosses into profits, it signals strong operational leverage—every additional user or trade costs less to service.

Valuation: Is It Expensive?

At the upper end of the price band (₹100), the post-issue market capitalisation of Groww comes to about ₹61,700 crore. The company’s forward (FY25) P/E multiple works out to roughly 33.8× based on reported profits. That multiple positions Groww on the higher side compared to many domestic listed broking/financial firms—but still within the range one might expect for a high-growth platform.

Let’s compare with peers: Domestic players such as Angel One trade at about 19.8×, Motilal Oswal at around 24.9×, Nuvama at 26.9×, and Prudent Capital at 58.9×. Among global peers, Interactive Brokers trades near 38.8×, Robinhood around 86×, and Nordnet approximately 25.6×. Each of these has a different business model, different market setup, and different scale—but the comparison offers context.

What justifies a premium multiple for Groww?

1. Market leadership: the largest active user base in retail broking.
2. Profitable growth: FY25 marked a net profit after the loss in FY24.
3. Expansion potential: wealth-adjacencies (lending, margin trading, bonds, etc.) could increase revenues per user.

What tempers the premium?

• The business remains sensitive to cyclical factors (equity volumes, derivative turnover).
• Material regulatory risk exists (for F&O, margin trading, leverage).
• Strong competition may squeeze margins.
• Execution risk: monetising the adjacent services at scale is not guaranteed.

In short, the valuation implies investors believe Groww will continue to grow rapidly, launch new revenue streams successfully, and maintain its leadership—if any of those assumptions falter, the valuation may look ambitious.

Grey Market Sentiment & Day-1 Subscription

Here’s how the market is behaving:

• Grey Market Premium (GMP): Reports indicate a GMP around ₹14–₹17 per share. That suggests the market expects listing gains of 14–17% over the upper price band (₹100).
• Day-1 subscription (by around midday of the first day): The overall bid stands at 0.24×. The retail portion has already crossed 1.01×. Non-institutional investors (NIIs) show lower subscription (~0.23×).
• Anchor book performance: With bids of about ₹50,000 crore and final allocation of ~₹2,984 crore, institutional interest appears strong.

These cues suggest decent demand among retail and strong institutional appetite. Yet remember: GMPs can swing wildly, subscription multiples early in the offering window can change, and listing gains depend on many unpredictable factors—market sentiment, lock-in expiries, broader index behaviour, and regulatory news.

Why Groww May Win

I highlight five key strengths:

1. Scale and leadership: When you dominate a segment (by active users), you gain advantages—brand recognition, referral loops, data insights, and cost efficiencies. Groww boasts market-leading scale in India’s populous retail broking segment.
2. Profitable growth: Platforms often burn cash early; Groww has already turned profitable (FY25) and continues to show momentum. That gives greater confidence in sustainability than a purely loss-making story.
3. Broad product roadmap: Today Groww offers trading, mutual funds/ETFs, bonds, IPO access. Tomorrow it plans margin-trading facilities, lending, APIs for third parties, commodity trading, wealth advisory, etc. Each new product adds potential revenue per user, enhancing pricing power.
4. Appeal to younger investors: Groww created strong resonance with first-time investors, younger demographics, mobile-first users. That demographic is likely to invest more over their lifetime—if the platform retains them.
5. Strong institutional backing: The oversubscribed anchor book signals faith from large, experienced investors. That adds governance and credibility to who stands behind the company, which matters for retail investors.

Risks You Must Know

Let’s look candidly at the main risk factors:

1. Regulatory and derivatives risk
   The broking industry depends significantly on derivatives (options & futures) and margin trading. If the regulator tightens rules (for example reducing client leverage, increasing margin requirements, lowering intra-day benefits), volumes and profitability may drop. That’s a real over-hang for Groww.
2. Intense competition and pricing pressure
   The Indian broking landscape includes strong incumbents (Angel One, Motilal Oswal, etc.), as well as digital challengers. Many firms compete on zero or minimal brokerage. Unless Groww achieves high share of wallet from users (in lending, wealth, bonds), it risks margin compression.
3. Cyclical volume risk
   When markets rally, retail participation surges and broking volumes soar; when markets slump, volumes tend to compress. If a prolonged bear phase hits, growth slows, and the premium multiple may look less justified.
4. Execution risk in adjacencies
   Trading is one business; building a full-stack wealth ecosystem with lending, margin trading, bonds, wealth advisory is another. Mistakes in risk control (credit losses), regulatory missteps, or failure to retain clients as they mature and expect advanced services could hamper growth.
5. Valuation risk
   Paying ~33.8× for FY25 earnings already bakes in high expectations. If any of the above risks manifest (slower growth, regulatory headwinds, margin squeeze), the stock could face disappointment.

Should You As A Retail Investor Subscribe?

When it makes sense:

• Your horizon spans 3–5 years or more.
• You believe the structural rise in retail investing in India continues strongly.
• You accept that this business will earn you gains not just from brokerage growth, but from adjacent services (e.g., lending, wealth) over time.
• You accept listing volatility and can abide through short-term swings.

When it may not make sense:

• You focus on very short-term gains (on listing day or week) and you cannot tolerate downside risk.
• You consider valuations strictly and believe paying ~33.8× is too rich compared to domestic peers (~20–25×) for a business in a competitive and regulated space.
• You prefer business models with steadier, more predictable earnings (not volume-sensitive, not many regulatory moving parts).

My verdict:

If I were advising myself, I’d say: Yes, subscribe—but with moderation. I’d apply at the upper band (₹100) if I believe in the business for the long haul, but I’d keep the size of the investment within a portfolio limit. I’d view this not as a quick flip, but as a longer-term hold—3-5 years. If I were aiming strictly for listing gains, I might choose to wait for subscription data, analyse GMP trends, and decide accordingly.

Practical Tips Before You Apply

1. Bid at the cutoff price (₹100) if the system allows; this often maximises allotment probability.
2. Decide the size of your application carefully—don’t over-expose your portfolio to one IPO.
3. Watch subscription levels on days 2 and 3—retail interest, NII and QIB appetite give useful signals.
4. Monitor regulatory updates (for example, F&O margin rules, changes in SEBI broking guidelines) which can materially impact this business.
5. Set your post-listing view ahead of time: Are you going to hold for years or look for a listing pop? If the latter, decide your exit criteria clearly.

Final Word

The Groww IPO offers access to a category-leading, profitable, and mobile-first investment platform targeting India’s fast-growing retail investor base. The business looks solid. The valuation sits at a premium. The decision comes down to: Do you trust the company to keep scaling, widen monetisation, and fend off regulation and competition? If you do—and you have a multi-year horizon—it offers a compelling entry. If you doubt those growth assumptions or want conservative valuations, you might sit this one out or apply only modestly.

In the end: it’s quality at a cost. The question: are you willing to pay that cost for the opportunity.

Also Read – How to Choose a Business Model for Your Startup