Investment tech platform Groww has filed its Draft Red Herring Prospectus (DRHP) with SEBI confidentially, relying on the pre-filing route permitted in Chapter IIA of SEBI regulations, which allows companies to file a DRHP while delaying publication of the details of an IPO for greater flexibility. During the filing, Groww made clear that it is fulfilling its disclosure requirements and being filed does not mean that the IPO will happen. However, sources indicate that the company is aiming for a significant listing to value it at $7 billion and raise money (estimates between $700 million and $1 billion) according to The Economic Times.

Pre-IPO Fundraise Gathers Momentum

Ahead of its IPO, Groww is working on a pre-IPO funding round aimed at raising between $250 million and $300 million. Notably, GIC, the sovereign wealth fund of Singapore, has sought clearance from the Competition Commission of India (CCI) to acquire a 2.14% stake in Groww through its investment arm Viggo Investments. GIC is reportedly investing around $150 million, and existing investor Tiger Global is also expected to participate in this round. These strategic investments are projected to push Groww’s valuation closer to the $7 billion mark, more than double its $3 billion valuation from its Series E round in 2021.

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Strategic Acquisition of Fisdom

In a significant move to strengthen its presence in the wealth management space, Groww has signed a definitive agreement to acquire fintech startup Fisdom in an all-cash transaction valued at approximately $150 million. Fisdom, backed by investors such as PayU and Quona Capital, turned EBITDA-profitable in the final quarter of FY24 and posted ₹84 crore in annual revenue. The acquisition, pending regulatory approvals, will allow Groww to deepen its offerings in financial advisory and wealth management as it prepares for life as a public company.

Financial Highlights: Growth Amid Tax-Driven Losses

While reporting a net loss of ₹805 crore in FY24, Groww’s total revenue surged by 119% year-over-year, totaling ₹3,145 crore. However, the loss was primarily caused by a one-time tax payment of ₹1,340 crore upon relocating the company’s domicile from the U.S. to India. Therefore, even when accounting for the tax “hit”, if the tax payment is disregarded, Groww still generated an operating profit of ₹535 crore, which demonstrates solid underlying business fundamentals.

Regulatory Clean-Up Ahead of IPO

Groww has also been addressing regulatory matters in anticipation of its public offering. The company settled two cases with SEBI recently: one involving a technical system glitch, for which it paid ₹34.1 lakh, and another concerning the violation of stock broker norms, settled with a payment of ₹47.85 lakh. These resolutions are seen as efforts to clear regulatory overhangs and ensure smoother IPO proceedings.

From Startup to Fintech Powerhouse

Founded in 2017 by Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal, Groww started as a direct mutual fund platform and has since expanded into stock broking, derivatives trading (F&O), IPO subscriptions, asset management, and is now venturing into wealth management under a new brand, tentatively titled ‘W’.

Today, Groww serves millions of users across India and is one of the country’s most downloaded investment platforms. Its growth has been fueled by India’s rising retail investor base and the broader shift toward digital financial services.

Competitive Landscape

In the investment tech and broader fintech space, Groww competes with Zerodha, Angel One, CRED, MobiKwik, and Upstox, while also facing increasing competition from ecosystem players like PhonePe, Moneyview, and Razorpay, many of whom are also exploring IPO opportunities in the near future.

Looking Ahead

Now that the confidential DRHP has been filed, a strategic acquisition is underway and Groww is conducting a large pre-IPO round of financing, Groww stands ready to make a compelling stock market entrance — it’s one of the most followed stock market launches expected in the Indian fintech arena. As approvals and market conditions happen, there is a lot of interest in how the company navigates through the final phases of listing and it is easy to see how this may not just be a new chapter for Groww, but a significant event for the developing and maturing Indian fintech ecosystem.

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