Groww IPO Shocks the Market With a 14% Debut Premium

Groww is one of the biggest stockbroking platforms that listed its shares via IPO on Wednesday, November 12, 10 AM (both on BSE and NSE) and its performance shocked everyone. It’s the first day of trading, and Groww got a 14% premium on the BSE and a 12% premium on the NSE. So, how huge was the investors’ response? Did the market experts predict this? How will Groww use the IPO money? For all that, learn more.

What Happened on the Listing Day (First Day of Trading)?

• Groww priced its shares at INR 100 each during the IPO.
• Later, the BSE shares began trading at INR 114. It's a 14% premium, with an additional INR 14.
• On the other hand, NSE opened the share at INR 112, which is ₹12 higher, or a 12% premium.
• Therefore, whoever got the shares in this IPO and sold them at the listing made an instant 12–14% profit. 

Why Is Groww’s IPO Notable?

Groww, in particular, broke the trend with a strong debut. Other companies, like Lenskart, Studds, and Orkla India, didn’t perform well on their listing days. Share prices of these companies didn't fall or rise. Therefore, the investors couldn't make an instant profit from these stocks, and hence Groww's IPO became a notable one.

What Experts Expected Before Listing?

On the grey market, Groww's IPO premium was only INR 5. So, the market hinted that the shares might list around INR 105 (a 5% profit only). On the contrary, Groww's listing actually grew by 12% to 14%, far better than expected (2-3 times higher). According to many experts, Groww's IPO was a surprising one.  

Groww's IPO Details

• PO size: ₹6,632 crore in total
• IPO price band: INR 95 to INR 100 per share.
• IPO dates: November 5-7.
• Company value: At the top price (INR 100 per share), Groww was valued at over INR 61,700 crore (which is roughly $7 billion).

Investor Response to Groww’s IPO?

Investors subscribed about 17.6 times more than what was issued by Groww. Let's say for every one share available, people wanted 17.6 shares. Here's a small breakdown of it:

• Institutional investors (QIBs): 22.02 times subscribed.
• Big individual investors (non-institutional): 14.20 times.
• Retail (small individual investors): 9.43 times.

How Will Groww Use the IPO Money?

• The raised funds will go in 2 ways: The fresh shares worth INR 1,060 crore will go directly to the company.
• Offer for Sale (OFS) worth INR 55.72 crore will go to the shareholders selling their stake.

From the fresh INR 1,060 crore, Groww plans to:

• Spend INR 225 crore on promoting the brand (branding and marketing).
• Wants to strengthen its loan business by investing in NBFC (Groww Creditserv) with INR 205 crore.
• Groww wants to expand its trading services with INR 167.5 crore going into Groww Invest Tech.
• Aiming to improve its cloud infrastructure by spending INR 152.5 crore on the tech.
• The rest will go into acquisitions and general business purposes.

Groww Startup Story: How It’s Disrupting Traditional Ways of Investments | Founders | Business Model | Funding | Revenue

Groww, founded in 2016, has grown with the idea of making investments simple, fast, and convenient. Learn more about Groww’s founders, tagline, history, launch date, business model, funding, growth, future plans, and more.

StartupTalky- Business News, Insights and StoriesSarika Anand