Groww Under Scrutiny as Proxy Advisors Raise Concerns Over ESOP, Board Appointments

Citing concerns about governance and transparency, proxy advice firm Institutional Investor Advice Services (IiAS) has recommended against all five resolutions put forth by Groww's parent company, Billionbrains Garage Ventures Limited. The stockbroker is requesting shareholder approval for changes to the founders' rights to designate board directors and the employee stock option (ESOP) plan.

The company's plan to revise and approve its ESOP Scheme 2024, which may give up to 331.5 million stock options, was rejected by IiAS in its voting advisory. The lack of clarity on the exercise price, which would be decided by the nomination and compensation committee, was brought to the attention of the proxy advice company. It made clear that the selections can have an excessively lengthy workout duration.

Why liAS Rejected Groww’s Proposal?

IiAS stated that there is no alignment between the interests of employees and investors if the stock options are granted at a substantial discount. liAS further pointed out that the option's exercise term may last up to 20 years from the date of vesting, and for ESOPs issued after listing, it may last up to 10 years. The cost of the option and the likelihood that it will be in-the-money can both be significantly increased by such an extended exercise time. The lengthy exercise period for ESOP systems is uncommon for businesses, it was added.

In order to give investor Peak XV Partners Investments VI-1 the ability to propose a non-executive director to the board, the firm has also requested permission to change its "articles of association" (AoA). As long as they are promoters, the modifications will also provide each of the company's founders—Lalit Keshre, Harish Jain, Ishan Bansal, and Neeraj Singh—the ability to designate a director for the board. According to the report, the promoters will retain these board nominating rights even if their shareholding drops to very small amounts. Without a minimum shareholding threshold, liAS opposed the ability to nominate people to the board. Nonetheless, the consultancy group has backed giving Peak XV Partners the rights, provided they own 10% of the business.

liAS Also Declined Groww’s ESOP Programme

Additionally, IiAS advised voting against allowing employees of affiliated and subsidiary enterprises to participate in the ESOP programme. Further, it opposed plans that would have had the Groww Employee Welfare Trust acquire shares in a secondary manner and provided funding for it.

According to IiAS, these resolves are directly related to the more general issues with the ESOP structure. In November 2025, Billionbrains went public on the markets. The resolutions are up for remote electronic voting, which started on December 20, 2025, and will conclude on January 18, 2026.