Groww share price surges 90%: Decoding the amazing rally & investor returns

New Delhi: One of the country's fastest growing stock broking platforms, Groww has registered an amazing rally after the listing. The way shares of parent company Billionbrains Garage Ventures have jumped since its debut on the stock market last week, it has surprised all investors, small and big. The stock jumped around 11 per cent today to touch Rs 193.91, and it seems that its momentum is not going to stop at the moment.

Groww shares made a tremendous start on the listing day itself and closed about 31% above the IPO price. After this, the continuous surge has brought more smiles on the faces of the lucky IPO allottees. In just a few sessions, initial investors have received a hefty return of around 94 percent. If the shares continue to grow at the same speed, then this stock may soon be included in the list of stocks which are called multibaggers in the market.

Groww’s market cap crossed the Rs 1 lakh crore mark after the stock jumped nearly 20 percent on Monday. With this, Groww has reached the category of about 100 selected companies, which have touched this magic figure in the Indian stock market.

Most interestingly, Groww is now more valuable than the combined market cap of eight old players across the industry such as Angel One, Nuvama Wealth, JM Financial, IIFL, 5Paisa, Anand Rathi and DAM Capital.

CEO becomes new billionaire

Groww's stock rally has also benefited its co-founder and CEO Lalit Keshre. The value of his holdings has now crossed $1 billion, making him join the line of India's new tech billionaires.

While the boom is thrilling investors, the opinions of experts regarding valuation are a bit mixed. Many analysts believe that right now Groww's rally seems to be running a bit ahead of the fundamentals.

At the time of the IPO, its P/E multiple was between 3337x, but now it is trading at around 61x, which is much above competitors like Motilal Oswal, Angel One or Nuwama. Financial experts point out that this premium hinges on Groww's digital scale and its future product expansion expectations, but value-oriented investors may need some caution at the current level.

Big sign of retail investor boom

Research analysts believe that Groww's stunning listing proves that both the number and confidence of retail investors in the country are increasing rapidly. The company is now making rapid strides not only in broking, but also in services like wealth management, commodities and margin trading.

Yet experts warn that the current valuation has already captured a lot of future growth. Therefore, further growth will depend only on the execution and scaling of the company, and not just on the sentiment.

Groww is scheduled to announce its second quarter results this Friday, November 21. Investors are waiting for this, because it will reveal whether the company's actual performance justifies this sharp surge in valuation.