Groww Enters IPO Race. A New Chapter in India's Fintech Ecosystem

The primary market is going to be busy this week starting from May 26 as a total of nine initial public offerings (IPOs) worth more than Rs 69 billion (bn), including four from mainboard segment, will hit Dalal Street.

In fact, this is the first time in 2025 that four mainboard IPOs are opening in a single week, as last this was seen in December 2024.

The improved market sentiment from the second week of April after witnessing subdued sentiment since last October and easing global concerns (geopolitical tensions and trade wars) seem to be boosting the primary market mood.

Amid this surge in IPO momentum, one name grabbing significant attention is Groww.

Why?

Groww, one of India's leading stockbroking and wealth management platforms, has filed draft papers with the capital markets regulator to launch its much-anticipated IPO.

The Bengaluru-based fintech firm has opted for the confidential pre-filing route, a relatively new mechanism gaining popularity among startups and growth-stage companies seeking greater flexibility ahead of listing.

While the final details of the offer remain under wraps due to the confidential route, Groww plans to list its equity shares on the NSE and BSE mainboards.

IPO Valuation and Purpose

As per the financial media sources, Groww is aiming for a valuation of US$ 7-8 billion, factoring in current market sentiment.

A 10-15% equity dilution at this valuation would peg the IPO size between US$ 700 million (m) and US$ 920 m. This would position it as one of the most closely watched IPOs in India's fintech sector.

The funds raised will be used mainly to strengthen the tech backbone of the company and fuel its next stage of development.

The company has planned to invest in product innovation, platform upgrades, and broader business expansion. it aims to deepen its access and provide a better experience to its growing user base.

From Underdog to Market Leader

Groww's rise to the top has been rapid. The company has beaten Zerodha to become the biggest player by the active client base.

Its market share increased from 20.9% to 26.3% in FY24. This indicates that it's no longer the new kid on the block.

In contrast, Zerodha's market share slipped to 16%, underscoring the intensity of the competition.

Groww added 3.4 million (m) new active clients during FY25, growing its base from 9.5 m in FY24 to 12.9 m, a 35.5% year-on-year (YoY) jump, the fastest among all major players.

Top Brokers (NSE active clients in million)	FY24	FY25	YoY change (%)
Groww	9.5	12.9	35.5
Zerodha	7.3	7.9	8.3
Angel One	6.1	7.6	24
Upstox	2.5	2.8	9.2
ICICI Securities	1.9	2	5.5

Data source: Equitymaster

Challenging Time for IPOs

Groww's IPO comes at a time when the broader broking industry is grappling with regulatory headwinds and weakening investor sentiment.

Recent norms tightening retail futures and options (F&O) participation, higher transaction taxes, and reduced exchange incentives have hit toplines across the sector.

In April 2025, Groww lost around 75,000 active clients, while rivals like Zerodha and Angel One also witnessed declines.

Angel One, a listed player, reported a 49% fall in net profit and 22% dip in revenue for the March quarter. The market expects toplines of many brokers to decline this year.

Strong Financial Growth Backing IPO Ambitions

Groww's financial story over the past few years is impressive, especially given the tough environment in the broking industry.

In FY23, the company finally turned profitable, posting a net profit of Rs 4.5 bn on revenues of Rs 12.8 bn. The next year saw even faster growth - revenue more than doubled to Rs 31.5 bn, and operating profit climbed to Rs 5.4 bn.

That said, Groww did report a net loss of Rs 8.1 bn in FY24, which was mainly due to a one-time tax hit of Rs 13.4 bn linked to its shift in corporate domicile to India.

This loss isn't a sign of trouble, while the sharp rise in revenue shows how quickly it has expanded.

Backed by Global Investors

Groww is backed by marquee investors including Peak XV Partners, Tiger Global, Ribbit Capital, and Microsoft CEO Satya Nadella.

For its IPO, the company has appointed JP Morgan India, Kotak Mahindra Capital, Citigroup Global Markets, Axis Capital, and Motilal Oswal as lead book-running managers.

Conclusion

The Indian fintech industry is estimated to be around US$ 110 billion (bn) in 2024 and its projected to reach about US$ 420 bn by 2029, as per Ajay Kumar Choudhary, Non-Executive Chairman and Independent Director, National Payments Corporation of India.

The government's push towards a digital economy, coupled with a young and tech-savvy population, is likely to propel the fintech sector to new heights.

As Dalal Street expects more fintech listings, Groww's IPO will be a critical litmus test. If successful, it could pave the way for similar growth-stage tech startups to pursue listings.

Investors should conduct thorough due diligence into the company's financials and corporate governance practices to ensure any investment aligns with their financial goals and risk tolerance.

For more information on IPOs, check out the list of upcoming IPOs.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...