Groww files updated DHRP with Sebi; targets Rs 7,000-crore IPO, outlines use of funds

Kolkata: Online brokerage firm Groww, which had more than 1.3 crore investors on its platform at the close of the last financial years (FY25) has filed a revised DHRP (Draft red herring prospect) with capital markets regulator Sebi to raise Rs 7,000 crore via an IPO. The Groww IPO, the size of which was being speculated about, has now climbed down from its earlier target of mopping up Rs 8,300 crore from the market.

The fresh issue segment will be relatively smaller than the OFS one and seeks to raise Rs 1,060 crore, while the OFS part will raise the rest. When existing shareholders sell a part of their holdings in a company through a new issue, those shares are referred to as OFS shares. The proceeds of OFS shares don't accrue to the company but to the promoters who sell their shares.

Reports stated that in June 2025 Groww enjoyed a market share in excess of 26%. The platform has had a trailblazing journey since 2017 when it was founded by former Flipkart employees. It is now seeking a valuation of $9 billion. Groww’s founders, Lalit Keshre, Harsh Jain, Neeraj Singh and Ishan Bansal, currently hold about 28% stake in the platform and they will sell only 0.07% through the IPO. Investors such as Peak XV Partners Investments VI-1, YC Holdings II, Ribbit Capital V, GW-E Ribbit Opportunity V, Internet Fund VI Pte and Kauffman Fellows Fund will be offloading shares through this issue.

Reports stated that Peak XV, Tiger Capital and Microsoft CEO Satya Nadella, who pitched in with funds will dilute their stake and plough the proceeds in some project led by technology.

Groww is based in Bengaluru. In May this year, it filed a draft red herring prospectus papers with Sebi for an IPO through the confidential pre-filing route, and, therefore no information was available on the company's plans. The rules require Groww to file an updated DRHP before the final prospectus and offer the shares.

As stated, a part of the proceeds of the fresh share sale, Rs 225 crore will be used for brand building and marketing activities, while an amount of Rs 205 crore will be earmarked for Groww Creditserv Technology which is the NBFC wing of the platform. This amount will bolster the capital base of the NBFC.

An amount of Rs 167.5 crore will be used to fund the margin trading business of Groww Invest Tech, and Rs 152.5 will be utilized for strengthening cloud infrastructure. The rest of the amount would be used for acquisitions and for general corporate purposes. The indication is clear -- Groww wants to grow fast through the inorganic route.

JP Morgan India, Kotak Mahindra Capital Company, Citigroup Global Markets, Axis Capital and Motilal Oswal Securities have been appointed the lead managers for the issue.

Groww has also revealed its financials in the DHRP -- profit of Rs 1,824 crore for FY25, while profit for Q1 FY26 was Rs 378 crore. The net profit margin is 44%. More than 80% of its new customers are acquired organically, the company said and put the retention rate at 77%.

Groww mutual fund numbers were also revealed -- SIP inflow of Rs 34,000 crore in FY25, which amounts to a high 11.8% of the industry total. June this year marked a high point when one-third of new SIPs in the country went via its platform. The company has also ventured into new sections such as wealth management, commodities, margin trading facility, loans against shares etc.